FIFA FINANCIAL REPORT 2005ar.fifa.com/mm/document/affederation/administration/51/52/69/2005... · 3 Foreword FIFA President 6 Chairman of the Finance Committee 8 Chairman of the Internal

56th FIFA Congress

Munich, 7 and 8 June 2006

FIFA FINANCIAL REPORT 2005

2

3

Foreword FIFA President 6

Chairman of the Finance Committee 8

Chairman of the Internal Audit Committee 10

Facts & Figures 2005 Overview 14

Income statement 16

Balance sheet 20

Budget comparison 22

Highlights 2005 26

2007-2010 Period Forecast for 2007-2010 38

Detailed budget for 2007 42

Special Topics Two new members 46

Preparing for the World Cup 48

SCORE project 52

Annexe Consolidated financial statements 2005 (IFRS) 56

Report by the Auditors to the Congress 107

Report by the Internal Audit Committee 109

FOREWORD

6

For an institution such as FIFA, success in business and

financial terms comes only if it works competently and

credibly on a sporting level. In FIFA’s case, we must there-

fore consistently prove the central competence we have

in staging world football championships in various cate-

gories. Only if we do this, can we increase the revenue

we generate through the sale of the rights associated

with these events.

During the twelve months covered by this report, FIFA has

gained very good if not top marks in this respect. With

the Beach Soccer World Cup in Brazil in May and the

Club World Championship in Japan in December, we

organised two highly attractive competitions – one entire-

ly new, the other a new take on an event that had been

staged once before. In addition, the FIFA Confederations

Cup in Germany – coming a year before our grand festi-

val of football in 2006 – finally won recognition and

enjoyed an extremely positive response from the fans and

the media. By deciding to stage the Confederations Cup

on a quadrennial basis from now on, as a dress rehears-

al for the World Cup in the same country and a year

before the big event, the FIFA Executive Committee has

followed the right tack and the sporting value of the

event has increased significantly as a result.

The sporting successes I have already mentioned – which

were accompanied by the World Youth Championship in

the Netherlands and the U-17 World Championship in

Peru, our first ever competition to be played exclusively

on artificial turf – make FIFA the leading provider of the

prized product we call ”association football”. Thanks to

DEAR MEMBERS OF THE INTERNATIONAL FOOTBALL FAMILY,

Foreword

FIFA President

7

a new approach, we have been able to seal marketing

rights contracts for 2007-2014 with significantly greater

returns than any we have signed before. The deals com-

pleted in 2005 with adidas, Sony, Hyundai, Coca-Cola

and Emirates can legitimately be seen as milestones in the

history of sports marketing.

The same can be said about our television contracts. By

marketing the European TV rights for the 2010 FIFA

World Cup™ individually in five key countries (France,

Germany, Italy, Spain and the United Kingdom) and

assigning the European Broadcasting Union (EBU) a pack-

age for the remainder of the continent, FIFA has set a

clear precedent and managed almost to double the

amount generated from the same rights for the 2006

World Cup. The market has reacted to our new proce-

dure by underlining that FIFA, its flagship event – the FIFA

World Cup™ – and football in general have reinforced

their coveted position in the international sporting rights

world.

FIFA has thus fulfilled its goal to secure its economic

future in the long term. We can now remain focused on

translating our financial success into sporting progress

and prosperity by means of even more extensive devel-

opment work at grass roots level, and ultimately by mak-

ing the game better, taking it to the world and making

the world a better place.

Joseph S. Blatter

FIFA President

8

In financial terms, 2005 – the third year of the 2003-2006

World Cup cycle – was yet another success for FIFA. With

a surplus of CHF 214 million, the world governing body

recorded its best ever result. As a consequence, FIFA now

has equity totalling CHF 461 million. FIFA has therefore

reached its stated aim of creating reserves of around

CHF 450 million by the end of the current four-year peri-

od twelve months ahead of schedule. We now have a

revised equity target of CHF 500 million or, expressed in

our future accounting currency, USD 400 million.

There are countless reasons for these pleasing figures. On

one hand, the standing committees, supported by the

FIFA administration, have once more fully respected the

budget constraints laid down by the Congress. On the

other hand, we have also been fortunate to profit from

the favourable development of the exchange rate

between the US dollar and the Swiss franc, the currency

currently used for FIFA’s accounts. However, this is pri-

marily a change on paper and cannot be considered to

be profit as such. Such incalculable fluctuations will be

minimised starting from FIFA’s next four-year cycle when,

as we have already confirmed, our balance sheet and our

income statement will be expressed in US dollars.

This positive development and the comfortable situation

in terms of liquidity made it possible for FIFA to pay out

CHF 1 million to each of the 32 teams that have qualified

for the 2006 FIFA World Cup™ finals before the end of

2005 so as to cover their preparation costs. In addition,

each association will receive CHF 2 million for each match

it plays in the group phase of the competition and is

therefore guaranteed to receive income of at least CHF 7

million. In total, CHF 300 million will be paid out to the

DEAR SIR OR MADAM,

Foreword

Chairman of the Finance Committee

9

teams in prize money, with the association whose team

wins the 2006 FIFA World Cup Germany™ taking home

an impressive CHF 24.5 million.

We already have equally positive signs for the coming

2007-2010 and 2011-2014 periods. The commercialisa-

tion of the World Cup has been extremely successful and

revenue from marketing and television rights for the

event has increased considerably. This is reflected in the

budget projection for the coming four-year period, with

revenue totalling USD 3.0 billion, of which USD 2.55 bil-

lion will be re-invested in the game of football through

financial assistance for the associations, competition-

related costs and other expenses. As is the case in the

current cycle, a quarter of the outgoings will once again

be devoted to development activities, while 44% will be

used to finance FIFA competitions and thus flow directly

back into the game. The Finance Committee has recom-

mended that USD 450 million, in other words, 15% of

the total estimated revenue, be put to one side to

strengthen FIFA’s equity further.

On behalf of the FIFA Finance Committee, I wish to thank

you for your support and trust. I am presenting you with

this report in the hope that you will read it carefully and

I am looking forward to hearing your comments at the

56th Congress in Munich (Germany) on 7-8 June 2006.

Julio H. Grondona

Chairman of the Finance Committee

10

Once again, I, as the chairman of the FIFA Internal Audit

Committee, have the privilege to report on the work car-

ried out by this body and on the results of the internal

audit conducted on FIFA’s finances.

As you can see from the audit report for 2005, KPMG

found no cause for concern during its audit. I consider

this positive conclusion to be yet another indication of

the high standards that FIFA insists upon in terms of

accounting practices and financial transparency.

In addition to corroborating the accounts, the Internal

Audit Committee also took time to monitor levels of

compliance with the Organisational Rules and Regula-

tions that FIFA introduced on 1 January 2004. In doing

so, we ascertained that the FIFA administration has

observed its duties to the very letter. In line with a pro-

posal made by our committee, the contents of these reg-

ulations have now been passed on to the member asso-

ciations for adoption so that our sport can benefit at

every level.

FIFA is nonetheless not resting on its laurels. Instead, the

governing body is striving to raise the bar even higher. In

order to meet the ever-increasing demands of Interna-

DEAR SIR OR MADAM,

Foreword

Chairman of the Internal Audit Committee

11

tional Financial Reporting Standards and compliance reg-

ulations, a new Consolidation and Compliance depart-

ment is being set up within the FIFA Finance Division. The

financial success borne out by rapidly increasing revenue

dictates that FIFA employs the appropriate tools and con-

trol mechanisms to ensure that these funds are handled

in a responsible, competent and focused way.

Finally, I wish to thank you once again for the trust and

support you have extended to our committee. You may

rest assured that my colleagues and I will continue to do

our utmost to work to the best of our knowledge and

fulfil our responsibilities to your complete satisfaction.

Dr Franco Carraro

Chairman of the Internal Audit Committee

FACTS & FIGURES 2005

14

EQUITY DEVELOPMENT (ACCORDING TO IFRS)CHF MILLION

INCOME STATEMENT (ACCORDING TO IFRS)CHF MILLION

BUDGET COMPARISONCHF MILLION

351395

336

740

874

660

214

712

582571

158141

469

778

335 263302

593

437

649737

393

362

2003

Revenue

Budget Actual

2004 2005 2006 2003 2004 2005 2006

Result

Expenses

Cash-in

Cash-out

Budget Actual Budget Actual Budget Actual

Above budget(acceleration)

Budget Actual Budget Actual Budget Actual Budget Actual

2003 2004 2005 2006

100

200

300

-100

400

500

600

238

>

94

-15

461= 500

01 Jan 2003 31 Dec 2003 31 Dec 2004 31 Dec 2005 31 Dec 2006(forecast)

Below budget(cost savings)

This page provides an overview of the facts and figures

for the entire 2003-2006 period and especially the year

2005. It includes the

– income statements according to IFRS for the

years 2003 to 2005

– budget comparison which compares effective

cash-in and cash-out for 2003, 2004 and 2005

with the respective budgets as approved by the

FIFA Congress (FIFA draws up and monitors its

annual budgets on a cash basis)

– equity development according to IFRS for the

years 2003 to 2005 and the forecast for 2006.

From a financial perspective, the year 2005 was a very

successful one. The following three key conclusions

can be drawn:

(1) For 2005, FIFA recorded a positive result of

CHF 214 million. The positive development of the

US dollar in relation to the Swiss franc during the

year 2005 contributed to this result.

(2) For 2005, FIFA reached its budget targets on

both the revenue and expense side.

(3) FIFA’s equity as at 31 December 2005 amounts to

CHF 461 million.

Overview

15

Facts & Figures 2005

Overview

In 2005, FIFA registered total revenue of CHF 874million according to IFRS, total expenses ofCHF 660 million and obtained a net result ofCHF 214 million.

The budget comparison shows that, in 2005, FIFAexceeded its cash-in target by CHF 56 million(effective cash-in of CHF 649 million; budget ofCHF 593 million) and was below its cash-out tar-get by CHF 32 million (effective cash-out ofCHF 437 million; budget of CHF 469 million).

The higher cash-in is due to the accelerated col-lection of revenue but does not impact on thefour-year result. The lower cash-out representseffective cost savings.

FIFA’s equity in the opening balance sheet as of 1January 2003 according to IFRS amounted to CHF -15 million and increased to CHF 94 millionas at 31 December 2003. One year later, FIFA’sequity amounted to CHF 238 million (31 Decem-ber 2004). Currently, FIFA’s equity amounts toCHF 461 million (31 December 2005). By the endof 2006, equity in excess of CHF 500 million (i.e.USD 400 million) is expected.

16

INCOME STATEMENT 2005CHF MILLION

INCOME STATEMENT 2005CHF MILLION

100

200

300

600

900

214

400

500

700

800

874

660

Revenue Expenses Result

Revenue• Event-related revenue• Other operating income• Financial income

Expenses• Event-related expenses • Development-related expenses• Other operating expenses*• Financial expenses

Result

8747523686

66033613917510

214

* Including expenses for personnel, transportation, travel and accommodation, IT,

depreciation and amortisation (shown separately in the Consolidated Income Statement, p. 59)

As of 2005, all listed companies in the European Union

have been obliged to apply International Financial

Reporting Standards (IFRS) in their financial statements.

Although FIFA is not a listed company, its financial

statements have been prepared in accordance with

IFRS since 2003.

This chapter provides an overview of the key financial

figures for 2005. The detailed financial statements for

2005 can be found in the annexe of this report on

pages 56-105.

Based on a decision taken by the 2003 FIFA Congress

in Doha, renowned international audit company KPMG

is auditing FIFA’s annual financial statements for the

2003-2006 financial period. KPMG’s report for the year

2005 can be found in the annexe on page 107. The

report by the Internal Audit Committee is on page 109.

For the year 2005, FIFA’s net result is positive and

amounts to CHF 214 million.

Income statement for 2005

17

Facts & Figures 2005

Income statement

For the period from 1 January to 31 December2005, FIFA registered total revenue of CHF 874million and total expenses of CHF 660 million.This led to a positive net result of CHF 214 mil-lion.

FIFA’s income statement shows the followingstructure on the revenue side: event-related rev-enue, other operating income, and financialincome. On the expenses side: event-relatedexpenses, development-related expenses, otheroperating expenses and financial expenses.

This structure reflects FIFA’s main objective, whichis to organise international competitions and toimprove and promote the game of football con-stantly through youth and development pro-grammes.

18

EXPENSES 2005CHF MILLION

REVENUE 2005CHF MILLION

23

36

86(10%)

(4%)

752 (86%)

100% = CHF 874 million

Financial income• Foreign exchange effects• Interest• Investments

Total

Other operating income• Brand licensing• Quality concept• Fines• Other (e.g. rental income,

sale of film)

Total

70142

86

21645

36

Event-related revenue• TV broadcasting rights

- 2006 FIFA World Cup TM

- Additional FIFA Events• Marketing rights• Hospitality rights• Licensing rights• Other

Total

42312

193651445

752

100% = CHF 660 million

10(2%)

175(26%)

139(21%)

336(51%)

Event-related expenses• Contributions to teams/participants• Contributions to LOC• Compensation for teams/participants• Rights protection/delivery• Other (e.g. computer solution,

insurance)• Accrued expenses

Total

Development-related expenses• Financial Assistance Programme• Confederations• Goal• Other (e.g. courses)

Total

Financial expenses• Interest• Foreign exchange effects• Derivatives

Total

Other operating expenses• Personnel costs• Transportation, travel,

accommodation• Event consultancy• Legal consultancy• External services• New Media• IT • Depreciation• Rent of property• Other (e.g. offices,

telecommunications, certification)

Total

7473456

62

76

336

79232512

139

6122

151296654

35

175

72% for FIFA events & development

1000

10

Revenue and expenses for 2005

19

Facts & Figures 2005

Income statement

Of the total revenue recorded in 2005, amount-ing to CHF 874 million, CHF 752 million (86%)came from FIFA events. The lion’s share of thisamount is attributable to the 2006 FIFA WorldCup Germany™ and was mainly generatedthrough the commercialisation of TV broadcast-ing rights (CHF 435 million) and marketing rights(CHF 193 million). Other operating incometotalled CHF 36 million (4%) and financial incomeamounted to CHF 86 million (10%). The relative-ly high financial income is due to the fact that theUSD/CHF exchange rate increased in 2005 lead-ing to a higher book value of FIFA’s USD assets.However, this appreciation does not reflectrealised currency gains. From 2007 onwards, theimpact of the USD will be minimised given thatFIFA will change its balance sheet currency fromCHF to USD.

On the expenditure side, CHF 336 million (51%)of the overall expenses of CHF 660 million for theyear 2005 were assigned to FIFA events. Thisincluded contributions to teams and participantsand local organising committees. The accruedexpenses of CHF 76 million within the event-related expenses was linked to costs incurred in2005 but not representing effective cash-out.CHF 139 million or 21% of the expenses relatedto FIFA development programmes (e.g. Goal andthe Financial Assistance Programme). This repre-sented a total of 72% of the overall expenses forFIFA events and development. Other operatingexpenses of CHF 175 million (26%) included, forexample, personnel costs. Financial expensesamounted to CHF 10 million (2%) and mainlyconsisted of interest effects.

FIFA’s revenue and expenses in the year 2005 were

determined to a considerable extent by FIFA events,

and in particular by the 2006 FIFA World Cup Ger-

many™.

Revenue and expenses directly related to the FIFA

World Cup™ are recognised in the income statement

using the ”percentage-of-completion” method

according to IFRS. This means that they are listed by

reference to the stage of completion of the event as at

the balance sheet date. The stage of completion of the

2006 FIFA World Cup Germany™ is assessed evenly

over the four-year 2003 to 2006 period. The applica-

tion of the percentage-of-completion method requires

that revenue and expenses be estimated reliably.

For Additional FIFA Events, revenue and expenses

are listed in the income statement when the event

takes place.

Expenses for development programmes such as the

Financial Assistance Programme (FAP) or Goal are

recorded on a straight-line basis over the project

period.

20

EQUITY DEVELOPMENTCHF MILLION

BALANCE SHEET AS AT 31 DECEMBER 2005CHF MILLION

500

600

400

200

100

300

151

+223

238

461

> = 500 (USD 400)

31 Dec 2002 Cash method

(audited)

31 Dec 2005IFRS (audited)

31 Dec 2006 IFRS (forecast)

Change31 Dec 2004 IFRS (audited)

• Result 2005• Change in hedging reserves

2149

ASSETS

Current assets • Cash & cash equivalents• Receivables• Prepaid expenses and

accrued income

Non-current assets• Property, plant, equipment• Intangible assets• Financial assets

1,440

952680114158

488245

5238

LIABILITIES AND EQUITY

Current liabilities • Payables• Income tax liabilities• Interest-bearing liabilities• Derivative financial liabilities• Accrued expenses and deferred income

Non-current liabilities• Interest-bearing liabilities• Provisions

Equity

1,440

954381

906

819

251213

461

FIFA’s balance sheet as at 31 December 2005

totalled CHF 1,440 million, including current assets

of CHF 952 million and non-current assets of CHF 488

million. FIFA’s current liabilities amount to CHF 954 mil-

lion and non-current liabilities to CHF 25 million. This

led to equity of CHF 461 million as at 31 December

2005. Equity will continue to increase over the remain-

der of the four-year period with the target being to

pass CHF 500 million (USD 400 million) by December

2006.

Balance sheet and equity development

21

Facts & Figures 2005

Balance sheet

FIFA’s current assets consist of CHF 680 millioncash and cash equivalents. Receivables amount toCHF 114 million, prepaid expenses and accruedincome to CHF 158 million.

Within the non-current assets, FIFA’s property,plant and equipment are valued at a total ofCHF 245 million, intangible assets at CHF 5 mil-lion and financial assets at CHF 238 million.

Under current and non-current liabilities, both“interest-bearing liabilities” items, which totalCHF 102 million, include the securitisation trans-action of CHF 65 million. Under IFRS, securitisa-tion is considered as a financing transaction, morespecifically, as a loan to third party investors.

FIFA’s equity as at 31 December 2002, based onthe cash-method of accounting, amounted toCHF 151 million. With the introduction of IFRS,several restatement effects had to be considered.As at 31 December 2004, FIFA’s equity amountedto CHF 238 million. Based on the positive 2005result of CHF 214 million and a change in thehedging reserves of CHF 9 million, the equity asat 31 December 2005 amounted to CHF 461 mil-lion. By the end of 2006, equity in excess ofCHF 500 million (i.e. USD 400 million) is expect-ed.

22

REVENUE 2005: BUDGET COMPARISONCHF MILLION

REVENUE 2005: COMPONENTSCHF MILLION

100

200

300

600

900 874

400

500

700

800

649

225

Total revenue(IFRS)

Accrued revenue

Cash-incomponent

50

100

150

300

200

250

400

450

500

550

600

650

350

593

649

56

Cash-incomponent

Budget 2005 (approved by

FIFA Congress)

Positive deviation(i.e. above budget)

Following the changeover to IFRS, it is important to

note that not all of the revenue generated in 2005

represented effective cash-in for FIFA. The total recog-

nised revenue has to be separated into a cash-in

component and an accrued component. The latter

is due to the application of the percentage-of-com-

pletion method according to IFRS.

The annual budgets that are submitted to the FIFA

Congress for approval every year are cash budgets. A

budget deviation analysis therefore needs to be based

on a comparison between the approved cash budget

and the above-mentioned cash component of the

actual figures.

A budget deviation analysis for 2005 shows that the

revenue budget approved by the FIFA Congress was

surpassed by CHF 56 million.

Analysis of revenue for 2005

23

Facts & Figures 2005

Budget comparison

The total revenue generated in 2005, amountingto CHF 874 million, can be divided into a cash-incomponent of CHF 649 million and accrued rev-enue of CHF 225 million.

The FIFA Congress approved a revenue cashbudget of CHF 593 million for 2005. With aneffective cash-in component of CHF 649 million,this budget was surpassed by CHF 56 million(9%). It is important to note that this positivedeviation is mainly due to accelerated TV rightspayments leading to an earlier collection of bud-geted revenue. However, this acceleration doesnot have an impact on the overall result for the2003-2006 period.

24

EXPENSES 2005: BUDGET COMPARISONCHF MILLION

EXPENSES 2005: COMPONENTSCHF MILLION

100

150

200

450

600

650

700660

250

300

500

550

437

223

Total expenses(IFRS)

Accrued expenses

Cash-outcomponent

50

100

150

300

200

250

400

450

500

550

600

650

350

469437 32

Cash-outcomponent

Budget 2005 (approved by FIFA Congress)

Positive deviation(i. e. below budget)

Analysis of expenses for2005

25

Facts & Figures 2005

Budget comparison

The total expenses incurred in 2005, amountingto CHF 660 million, can be divided into a cash-out component of CHF 437 million and accruedexpenses of CHF 223 million.

The FIFA Congress approved an expense cashbudget of CHF 469 million for 2005. With effec-tive cash-out of CHF 437 million, the expensesincurred were under the budget by CHF 32 mil-lion (7%). This positive deviation is due to costsavings that were achieved in 2005.

The principle described on page 23 of this report for

revenue also applies to expenses. This means that not

all of the total expenses incurred in 2005 represented

effective cash-out for FIFA. The total expenses need to

be separated into a cash-out component and an

accrued component.

A budget deviation analysis for 2005 shows that the

effective cash-out was CHF 32 million lower than

the expense budget approved by the FIFA Congress.

26

2

5 6

8 9

11

1

4

7

10 12

3

In June 2005, Brazil emerged as the winners of the

FIFA Confederations Cup in Germany. A year

before the kick-off of the 2006 FIFA World Cup™, the

Brazilians gave themselves a great boost with some

compelling performances en route to the title. A mas-

terful 4-1 victory over fierce South American rivals

Argentina blew away any doubts that the Seleção are

hot favourites to retain their FIFA World Cup™ title in

2006.

Seven of the eight teams that took part in the tourna-

ment also figure in the field for this year’s World Cup.

In addition to hosts Germany, Argentina, Australia,

Brazil, Japan, Mexico and Tunisia have all qualified.

European champions Greece are the notable absen-

tees, after failing to follow up EURO 2004 glory with

World Cup qualification.

The fans made sure that there was a festive World Cup

atmosphere in the stadiums during last year’s tourna-

ment, turning the festival of champions into a huge

celebration of football and making the World Cup slo-

gan ”A time to make friends” a genuine reality. In

total, 575,000 spectators attended the 16 matches in

Cologne, Frankfurt, Hanover, Leipzig and Nuremberg.

They were rewarded with 56 goals overall, beating the

previous record from the 1999 FIFA Confederations

Cup in Mexico by a single strike.

Whether taking part or watching, everyone agreed

that the FIFA Confederations Cup Germany 2005 had

given them a thirst for more. Roll on the World Cup.

Additional FIFA Events

27

Facts & Figures 2005

Highlights 2005

The kick-off of a successful tournament that pro-duced countless thrilling match-ups and stunninggoals.

Master craftsmen at work: Brazil recorded afamous victory in last year’s FIFA ConfederationsCup, a thrilling competition from start to finish.

1 - 6

7 - 12

28

2

5 6

8 9

11

1

4

7

10 12

3

Argentina secured a fifth FIFA World Youth Cham-

pionship title when the event was held in the Nether-

lands last year for the fifteenth time. While a well-

organised and courageous Nigerian side ran them a

close second, the Argentinians emerged deserved

world champions thanks to the talismanic Lionel

Messi’s two penalties in the fiercely contested final.

The FIFA World Youth Championship Netherlands 2005

was packed with entertaining football and will be

remembered as one of the most exciting tournaments

ever. The impeccable hospitality of the host nation

played a key part in that success and the local enthu-

siasm continued unabated even after the home team’s

elimination.

The FIFA U-17 World Championship in Peru in Sep-

tember and October 2005 was a tournament of inno-

vation. The first FIFA world championship ever to be

played exclusively on artificial turf, it proved a won-

derful success with a positive response from all those

involved. However, the tests of another innovation – a

football embedded with a chip to determine whether

or not it had crossed the goal line – failed to produce

the results that had been hoped for.

The championship saw a new development in sporting

terms as well, as Mexico claimed their first ever world

title.

29

Facts & Figures 2005

Highlights 2005

Argentina took the laurels at the end of an elec-trifying World Youth Championship in the Nether-lands.

Football’s stars of tomorrow were given a verywarm Andean welcome when Peru hosted theFIFA U-17 World Championship.

1 - 6

7 - 12

30

2

5 6

8 9

11

1

4

7

10 12

3

France conquered the Copacabana in May 2005. In

the inaugural FIFA Beach Soccer World Cup, a

roaring success in every perspective, a strong field

enthralled the fans. Drawing on a blend of defensive

strength and attacking flair, the French side led by foot-

ball legend Eric Cantona were unquestionably the best

and most balanced team in the tournament.

Following this successful premiere, FIFA is looking for-

ward to more thrills and spills during the second FIFA

Beach Soccer World Cup when it returns to the same

venue later this year. Portugal and Brazil will both be

out for revenge, while the Japanese will hope to repeat

last year’s exploits. At the same time, Uruguay, Ukraine

and Spain will want to show that they did not perform

to their full potential in 2005.

In the run-up to the competition, the FIFA Club World

Championship TOYOTA Cup in Japan was billed as

the tournament to decide the champion of champions.

The championship in December 2005, played using a

new six-team format, lived up to expectations in every

way with hard-fought games between closely matched

teams. Al Ahly (Egypt), Al Ittihad (Saudi Arabia),

Deportivo Saprissa (Costa Rica) and Sydney FC (Aus-

tralia) were worthy representatives of their respective

continents, as were Brazilian club Sao Paulo and Eng-

lish side Liverpool. South American champions Sao

Paulo just had the edge over their European counter-

parts Liverpool to record a tight 1-0 win in an excellent

final. Mineiro’s 27th minute goal was just enough to

separate the teams in front of almost 67,000 fans at

the Yokohama International Stadium.

31

Facts & Figures 2005

Highlights 2005

Top-class sport meets laidback lifestyle during theFIFA Beach Soccer World Cup in Rio de Janeiro.

Successful relaunch: the FIFA Club World Cham-pionship exceeded all expectations.

1 - 6

7 - 12

32

2

5 6

8 9

11

1

4

7

10 12

3

1

2

3

4

5

6

7

8

9

10

11

12

Originally the brainchild of FIFA President Joseph S.

Blatter, the Goal Programme was ratified by the

1999 FIFA Congress in Los Angeles. The launch of Goal

heralded a new era in FIFA’s development work. Goal

was based on the vision of the House of Football –

not just one house but a house in each country and a

house for every one of our 207 member associations.

In the light of the overwhelming success of the Goal

Programme, the 2002 FIFA Congress in Seoul voted to

continue the scheme for another four years with a

total budget of CHF 100 million. As a result, the

goal of setting up headquarters and a training centre

for each association will soon be realised.

By the end of 2005, a total of 176 countries had

benefited from the Goal Programme through 223

projects. Several countries that have successfully com-

pleted their first project have already been granted a

second project. Through regular follow-up visits by its

development officers and staff, FIFA ensures that the

facilities are maintained and used properly and fully.

Associations are encouraged to recruit full-time tech-

nical directors and assign sufficient resources to draw-

ing up comprehensive technical development plans

that will maximise the impact of technical centres.

Goal and FAP have played a pivotal role in making

football more professional. Goal and FAP are not only

sources of hope and inspiration for the member asso-

ciations but they also serve as an incentive for further

investment in the development of football.

Goal Programme

33

Facts & Figures 2005

Highlights 2005

Rwanda: association headquarters and technical

centre in Kigali, opened on 14 April 2005

Sudan: association technical centre in Khartoum,

opened on 21 July 2005

Malawi: technical centre and pitch in Blantyre,

opened on 20 February 2005

Bhutan: association headquarters and youth

development centre in Thimpu, opened on

15 May 2005

Nepal: three regional technical centres in

Bharatpur, Baghkhor and Mechinagar, opened

on 14 May 2005

Bangladesh: association headquarters and tech-

nical centre in Dhaka, opened on 10 April 2005

Guam: association headquarters in Dededo,

training facilities and floodlight installations,

opened on 7 May 2005

Niger: association headquarters and technical

centre in Niamey, opened on 4 June 2005

Honduras: five grass pitches at Tegucigalpa tech-

nical centre, opened on 27 August 2005

Trinidad and Tobago: national futsal centre in

Macoya, opened on 30 July 2005

Vanuatu: technical centre with four pitches in

Teouma, Port Vila, opened on 27 August 2005

Greece: football pitch in Veria, opened on

25 November 2005

1

2

3

4

5

6

7

8

9

10

11

12

34

FINANCIAL ASSISTANCE PROGRAMME: USE OF FUNDS BY ASSOCIATIONS PER CENT*

FINANCIAL ASSISTANCE PROGRAMME: USE OF FUNDS BY ASSOCIATIONS PER CENT*

21

16

1814

22

9

100% = USD 342 million**

Youth football

Men‘s competitions

Various(Event management, marketing & communications, other)

Infrastructure

Planning & administration

Technical development(women’s football, technical development, refereeing, medical, futsal/beach soccer)

* Distribution for 2001-2005

** Total FAP funds distributed to associations from 1999-2005

* Distribution for 2001-2005

Youth football

Asia Africa North and South Oceania EuropeCentral America

America,Caribbean

80

70

60

40

30

20

10

50

90

100

26

19

23

10

16

6

14

21

14

16

21

14

15

15

22

23

15

10

10

7

3

15

47

24

11

24

21

15

5

26

14

14

31

6

9

18

Technical development

Planning & administration

Infrastructure

Various

Men’s competitions

35

A glance at how funds have been apportioned bythe member associations in the different geo-graphical regions reveals a number of differencesin terms of their favoured areas of football devel-opment as well as some similarities that applyaround the globe. Generally speaking, a substan-tial portion of funds is being used to build infra-structure, particularly in South America, Europeand Africa.

In the regions with relatively small football popu-lations and limited funds of their own, such asOceania and the Caribbean, associations areinvesting a much larger share of FAP funds inplanning and administration to meet fundamen-tal requirements. The associations in the Northand Central America and the Caribbean regiondedicate more FAP funds to cover these basic run-ning costs than in any other part of the world.

In Oceania and Asia, around 50% of the funds isinvested in technical and youth development. InSouth America, only 10% of FAP funds is invest-ed in technical development since professionalfootball is highly developed and largely self-financing across the region. Men’s national teamsreceive a larger share of FAP funds in Africa thanin any other region (21%).

Facts & Figures 2005

Highlights

Financial Assistance Programme

In 1999, FIFA President Joseph S. Blatter began to

implement the Financial Assistance Programme

(FAP) that his predecessor, Dr João Havelange, had

launched for the benefit of the member associations.

Each association, regardless of size, received

USD 1 million to be invested in football development

for the four-year cycle 1999-2002. The confedera-

tions received USD 10 million each over the same

period. The same amounts are being paid to the asso-

ciations and confederations over the 2003-2006 peri-

od to fund worthwhile projects based on long-term

plans for the member associations.

In 2003, FIFA approved new FAP regulations, which

stipulate that all of the member associations and the

six confederations must conduct local audits. The year

2005 saw FIFA analyse these local audits in collabora-

tion with its auditors, KPMG Zurich. 93% of the mem-

ber associations submitted satisfactory audit reports,

6% were incomplete, while only 1% failed to submit

a report. While the associations whose audits did not

meet requirements have had their FAP allocation

frozen until the situation is resolved, overall collabora-

tion with the member associations during this exercise

has been excellent.

The associations are encouraged to invest the funds

they receive in high-priority projects. However, as from

2005, they are compelled to set at least 10% aside, in

other words USD 25,000, to promote women’s foot-

ball. FIFA believes that women’s football will make

enormous progress over the next few years as a result

of this unequivocal financial commitment.

2007-2010 PERIOD

38

EQUITY FORECAST 2006-2010USD MILLION

BUDGET 2007-2010USD MILLION

100

200

300

600

400

500

800

900

700

400 70

110

95

850

450

175

Revenue

31 Dec 2006 31 Dec 20102007 2008 2009 2010

Investment Result

300

600

900

1800

1200

1500

2400

2700

3000

3300

2100

2,550

3,000

450 (15%)

The sale of FIFA’s rights for the 2007-2010 period com-

menced back in 2004 and the process has been pro-

gressing extremely well ever since. The revenue gen-

erated from media rights and from marketing between

2007 and 2010 will be significantly greater than in

the current period. This can be attributed firstly to the

fact that football has retained its enviable position in

the international sports rights market and secondly to

FIFA’s modified and improved strategy for com-

mercialising these rights.

The successful sale of these rights will open many

exciting doors to FIFA in the years that follow the

2007-2010 period, thus safeguarding the long-term

security of the world governing body. FIFA will con-

sequently be in a position to continue to fulfil its obli-

gations to its members in every respect.

Budget overview and equity forecast

39

2007-2010 Period

Forecast for 2007-2010

As of 1 January 2007, the currency used in FIFA’saccounts will change from the Swiss franc to theUS dollar. The reason for this change is that thedollar is the currency for the majority of FIFA’sincoming and outgoing transactions. As a result,the budget for the 2007-2010 period will nowalso be presented in USD.

FIFA is budgeting for overall revenue of USD 3.0billion during the 2007-2010 period and is plan-ning to make investments totalling USD 2.55 bil-lion, which will lead to a positive result ofUSD 450 million. This means that 15% of revenuewill be set aside as reserves, which is the mini-mum figure recommended by both the InternalAudit Committee and the Finance Committee.

FIFA conservatively estimates that it will haveequity of USD 400 million (CHF 500 million) at theend of the 2003-2006 period. Using this figure asa basis and adding the projected positive 2007-2010 result of USD 450 million, FIFA can look for-ward to equity of USD 850 million at the end of2010. The Internal Audit Committee and theFinance Committee both consider that FIFAshould increase this equity even further in orderto increase its independence and to prepare itselffor any unexpected turns of events in the future.

40

BUDGET 2007-2010: INVESTMENTUSD MILLION

BUDGET 2007-2010: REVENUEUSD MILLION

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

2600 2,550

417

198

230

880

640

185

300

600

900

1200

1500

1800

2100

2400

2700

3000

3300

3,000

1,900

900

200Other (e.g. licensing, hospitality)

Marketing rights

TV broadcasting rights

Revenue 2007-2010

Investment 2007-2010

Development• Financial Assistance

Programme• Goal• Special projects• Football for Hope• Referee development• Other (e.g. courses)

Additional FIFA Events

Football governance• Committees and Congress• Football administration• Legal matters

2010 FIFA World Cup TM

• Contribution to LOC• Prize money• Operating costs• Event protection costs

Exploitation of rights• Contractual obligations• Operating costs

Operational costs

The forecast for the 2007-2010 period has already

been presented to the FIFA Finance Committee and the

FIFA Executive Committee and will be distributed to the

2006 FIFA Congress in Munich.

The budgeted revenue for 2007-2010 totalling

USD 3.0 billion is calculated based on income that is

guaranteed by contracts.

The breakdown of the USD 2.55 billion in invest-

ments planned during the 2007-2010 period will be

very similar to that for the current 2003-2006 period,

with around a quarter of the total being allocated to

development work. In more specific terms, the funds

for development will be increased by USD 196 million

or 44% compared with the amount for 2003-2006. In

all, USD 1.75 billion or 69% of all outgoings will be re-

invested in football through development (USD 640

million) or competitions (USD 880 million + USD 230

million).

Revenue totalling USD 3.0 billion is budgeted for2007-2010. Of that overall revenue, USD 1.9 bil-lion (63%) comes from TV broadcasting rights,USD 900 million (30%) from marketing rights andUSD 200 million (7%) from other sources (e.g.licensing payments, hospitality).

Budget overview for 2007-2010

41

2007-2010 Period

Forecast for 2007-2010

Planned investments for 2007-2010 totalUSD 2.55 billion, of which USD 640 million (25%)will go to development, USD 880 million (35%)to the 2010 FIFA World Cup™ and USD 230 mil-lion (9%) to additional FIFA events. This meansthat 69% of all investment will be pumped backinto football through development projects andFIFA competitions. In addition, USD 198 million(8%) will be set aside to finance the commercial-isation of rights, USD 185 million (7%) will beallocated to football governance and USD 417million (16%) will be used to cover operationalcosts.

42

BUDGET 2007: INVESTMENTUSD MILLION

BUDGET 2007: REVENUEUSD MILLION

50

100

150

200

250

300

350

400

450

500

550

99.2

46.6

144.9

187.5

525.1

46.9

100

150

200

250

300

350

400

450

500

550

600

650617.0

383.0

203.0

31.0Other (e.g. licensing, hospitality)

Marketing rights

TV broadcasting rights

Competitions• 2010 FIFA World Cup TM

• FIFA Women’s World Cup China 2007• FIFA U-20 World Cup Canada 2007• FIFA U-17 World Cup Korea 2007• Other competitions

144.974.522.613.813.620.4

Development• Financial Assistance Programme• Goal• Special projects • Football for Hope• Referee development• Other (e.g. course programme)

187.566.830.043.85.2

10.031.7

Exploitation of rights• New Media• Hospitality packages• Account management & rights delivery• Business development• Event boards• Quality concept• Other (e.g. licensing)

46.69.76.65.03.83.32.8

15.4

Football governance• Committees and Congress• Legal matters• Football administration• Other (e.g. CIES)

46.928.010.02.46.5

Operational expenses and services• Presidential Office• General Secretary• Communications• HR & Services• Other (e.g. Finance & Controlling)

99.23.35.08.4

69.113.4

Revenue 2007(cash component)

Investment 2007(cash component)

The detailed budget for 2007 has been approved by

the FIFA Finance Committee and the FIFA Executive

Committee and now requires ratification from the

2006 FIFA Congress.

Revenue and investments in 2007

43

2007-2010 Period

Detailed budget for 2007

SPECIAL TOPICS

46

EAST TIMOR

Borneo

Kalimantan

Makassar

Sulawesi

Banda Sea

Timor Sea

Kupang Arafura SeaDenpasar

JAKARTAJava Sea

AUSTRALIA

Semarang

MALAYSIA

Mayotte

MORONIIndian Ocean

Mozambique Channel

Mohéli(Mwali)

Grande Comore(Njazidja)

MoutsamoudouAnjouan(Nzwani)

Domoni

Moutsamoudou

Fomboni

In Timor-Leste and Comoros, the 55th Ordinary FIFA

Congress in Marrakech on 12 September 2005 admit-

ted the 206th and 207th members of the internation-

al football family.

Football’s omnipresence in Timor-Leste is a sign of the

Portuguese influences in the country. Today there are

some 200 clubs across Timor-Leste, with the eight top

sides playing in the first division.

There is still much work to be done in almost every

area of football on this island at the northern tip of the

Indonesian archipelago. Reconstruction in the after-

math of the nation’s civil war is the first step. FIFA has

sent instructors to run refereeing courses and coaches

to support their counterparts in the country. The pri-

ority now is to build a stadium and lay a football pitch

for international matches.

Football is the most popular sport in Comoros. At

present, the nation has three leagues with relegation

and promotion between them. The top league is sub-

divided into three on a geographic basis. The winners

of these three regional divisions play off at the end of

the season to decide the national champions.

The Comoros’ admission to the FIFA family is an impor-

tant milestone that brings hope that football can now

make a giant leap forwards. The first objective is to

build an international stadium that the nation can be

proud of and where top matches can be staged.

FIFA family continues to grow

47

Special Topics

Two new members

In Timor-Leste and Comoros, two new memberswere embraced by the international football fam-ily when the 55th Ordinary Congress convened inthe magical city of Marrakech.

48

1 World Cup Stadium, Hamburg 2 World Cup Stadium, Hanover 3 Olympiastadion, Berlin

4 Zentralstadion, Leipzig 5 Franken-Stadion, Nuremberg 6 World Cup Stadium, Munich

7 Gottlieb-Daimler-Stadion, Stuttgart 8 Fritz-Walter-Stadion, Kaiserslautern 9 World Cup Stadium, Frankfurt

10 World Cup Stadium, Cologne 11 World Cup Stadium, Dortmund 12 World Cup Stadium, Gelsenkirchen

More than 90% of FIFA’s total revenue comes from the

sale of FIFA World Cup™ rights. These rights are com-

mercialised in four main areas, namely broadcasting,

marketing, hospitality and licensing.

The revenue from the commercialisation of these rights

is of crucial importance to FIFA because, as well as

funding its range of development programmes and

covering general running costs, the governing body

must also finance the organisation of various interna-

tional tournaments, including most notably the 2006

FIFA World Cup™. The successful commercialisation of

these rights is an essential requirement in ensuring that

FIFA and the local organising committee have the nec-

essary private funding to organise the World Cup to

the high standards that are now expected around the

globe.

The World Cup’s pre-eminent standing in every respect

was underlined once more during the Final Draw in

Leipzig on 9 December 2005. More than 2,000 guests

from the worlds of politics, finance, culture and sport

were joined by 1,200 members of the international

media at the event, while almost half a billion viewers

were glued to their TV screens worldwide.

2006 FIFA World Cup Germany™

49

Special Topics

Preparing for the World Cup

BERLIN

Leipzig

Nuremberg

Munich

Stuttgart

Frankfurt

Cologne

Dortmund

GelsenkirchenHanover

Hamburg

DanubeRhine

Elbe3

4

9

5

6

7

8

10

11

12

1

2

Kaiserslautern

50

The excitement was, of course, at its most intense in

the countries of the 32 finalists, which include no less

than eight debutants. Africa alone provides four of

these newcomers with Angola, Côte d’Ivoire, Ghana

and Togo. Among the European qualifiers, Ukraine are

playing in the World Cup finals for the first time, while

Serbia and Montenegro appear under a new name but

hope to continue the nation’s strong footballing tradi-

tion. Czech Republic, who last reached the World Cup

in 1990 when still part of Czechoslovakia, will take

part in the finals for the first time as an independent

nation. And last but by no means least, the Caribbean

will be represented in Germany by World Cup new-

comers Trinidad and Tobago.

Eight debutants out of 32 teams. Discounting the 1934

tournament in Italy, the second World Cup finals, when

many teams naturally made their debut, it represents

a new record. Yet it must be said that that comes as

no great surprise. One explanation for the phenome-

non has to be FIFA’s development work over the last 25

years, which is financed by the revenue it receives from

the sale of World Cup rights as mentioned on page 49.

Our youth tournaments, the Olympic Football Tourna-

ments and the FIFA Confederations Cup allow players

to gain the experience of competitive football that has

helped them to make their mark in World Cup quali-

fiers. In Germany, it will be a time for the entire foot-

ball world to make friends. And that is a key part of

the globalisation process that FIFA so vigorously sup-

ports.

51

Special Topics

Preparing for the World Cup

A time to make friends in Leipzig: the spectacu-lar Final Draw for the 2006 FIFA World CupTM,attended by 2,000 guests from the spheres ofpolitics, culture and football as well as 1,200members of the international media, was beamedto TV viewers all around the globe.

52

SCORE TARGETSCHF MILLION

Focus on revenue increase

Focus on cost optimisation

Impl

emen

tatio

n m

onito

ring

Additional and past events

FIFA brands

Professionalisation

Operational IT projects

e-Strategy/computer solution

Development programmes

CAS, professional refereeing

SCORE institutionalisation

Revenue targets

Short-term (2001-2002) 10-30

Medium-term (2003-2006) 60-110

Cost targets

Short-term (2001-2002) 70-80

Medium-term (2003-2006) 170-290

Overall targets

Short-term (2001-2002) 80-110

Medium-term (2003-2006) 230-400

Total approx. 310-510

Focus on revenue increase

Focus on cost optimisation

Impl

emen

tatio

n m

onito

ring

Additional and past events

FIFA brands

Professionalisation

Operational IT projects

e-Strategy/computer solution

Development programmes

CAS, professional refereeing

SCORE institutionalisation

SCORE PROGRESS, END OF 2005CHF MILLION

2001-2004

Target Realised

310-510 506 32 538

Total realised

2005

Realised

2001-2005

SCORE has the ambitious goal of generating a total

value of between CHF 310 million and CHF 510 mil-

lion from 2001 to 2006. By the end of 2005, CHF 538

million had already been realised.

SCORE project

53

Special Topics

SCORE project

The SCORE project is made up of nine modules,two of them focus on increasing revenue and sixon optimising expenses. The ninth module (mon-itoring implementation) strictly supervises theimplementation of initiatives on both the revenueand expenditure sides.

The short-term objective of SCORE was to bringabout a total value of CHF 80-110 million by theend of 2002. In the medium term, the aim is torealise savings of CHF 230-400 million for the2003-2006 period. The overall impact by 2006should thus be savings of CHF 310-510 million.

SCORE was launched successfully in 2001. Morethan 80 initiatives were identified, through whichFIFA has so far actually realised a value ofCHF 538 million.

ANNEXE

56

Consolidated financial statements according to International

Financial Reporting Standards (IFRS) as per 31 December 2005

Page

CONSOLIDATED INCOME STATEMENT 59

CONSOLIDATED BALANCE SHEET 60

CONSOLIDATED CASH FLOW STATEMENT 61

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 62

Notes to the consolidated financial statements

ACCOUNTING POLICIES 63

A. General information and statement of compliance 63

B. Basis of presentation 63

C. Basis of consolidation 63

D. Foreign currency translation 64

E. Income statement 64

F. Revenue recognition 65

G. Event-related expenses 65

H. Development-related expenses 66

I. Operating lease payments 66

J. Financial expenses and financial income 66

K. Income taxes 67

L. Cash and cash equivalents 67

M. Derivatives 68

N. Hedging 68

O. Receivables 69

P. Property, plant and equipment 69

Q. Intangible assets 69

R. Financial assets 70

S. Impairment 71

T. Payables 71

U. Interest-bearing liabilities 71

V. Employee benefit obligations 71

W. Provisions 72

X. Equity 72

57

Annexe

Consolidated financial statements 2005 (IFRS)

NOTES TO THE CONSOLIDATED INCOME STATEMENT 73

1 Revenue from television broadcasting rights 73

2 Revenue from marketing rights 74

3 Revenue from licensing rights 74

4 Revenue from hospitality rights 75

5 Other event-related revenue 76

6 Event-related expenses 77

7 Other operating income 79

8 Development-related expenses 80

9 Personnel expenses 82

10 Other operating expenses 84

11 Financial income 84

12 Financial expenses 85

13 Income taxes 86

NOTES TO THE CONSOLIDATED BALANCE SHEET 87

14 Cash and cash equivalents 87

15 Derivative financial assets and liabilities 88

16 Receivables 89

17 Prepaid expenses and accrued income 90

18 Property, plant and equipment 91

19 Intangible assets 92

20 Financial assets 93

21 Payables 93

22 Interest-bearing liabilities 94

23 Accrued expenses and deferred income 95

24 Provisions 96

25 Equity 96

58

OTHER DISCLOSURES 97

26 Risk management and hedging activities 97

27 Legal matters and contingent liabilities 100

28 Capital commitments 100

29 Contingent revenue 100

30 Value-in-kind revenue 101

31 Operating leases 102

32 Related party transactions 102

33 Cancellation insurance – alternative risk transfer 104

34 Consolidated subsidiaries 105

35 Post balance sheet events 105

These consolidated financial statements are published in English, German,French and Spanish. In the case of inconsistencies, the English original version isauthoritative.

59

CONSOLIDATED INCOME STATEMENT

in CHF Note 2005 2004

Event-related revenue

Revenue from television broadcasting rights 1 434,681,926 410,834,614

Revenue from marketing rights 2 192,831,506 172,403,505

Revenue from licensing rights 3 14,367,549 13,284,131

Revenue from hospitality rights 4 65,000,000 65,000,000

Other revenue 5 45,504,636 40,866,878

Total event-related revenue 752,385,617 702,389,128

Event-related expenses 6

Compensation for teams and participants -45,202,147 -28,530,492

Contributions to teams -73,789,474 0

Contributions to local organising committees -72,525,378 -27,230,029

Computer solution -10,713,341 -5,879,723

Rights protection – rights delivery -6,303,735 -5,878,138

Insurance -5,038,911 -4,728,904

Other -46,141,814 -14,981,782

Event-related expenses – accrued -75,884,398 -166,737,067

Total event-related expenses -335,599,198 -253,966,135

Event-related gross result 416,786,419 448,422,993

Other operating income 7 35,579,895 33,636,248

Development-related expenses 8 -139,248,940 -140,459,168

Personnel expenses 9 -61,181,113 -49,373,245

Transportation, travel and accommodation expenses -21,970,668 -21,370,827

IT expenses -6,255,408 -7,316,786

Depreciation and amortisation 18/19 -5,455,121 -5,548,739

Other operating expenses 10 -78,652,053 -70,902,445

Operating result before financial items 139,603,011 187,088,031

Financial income 11 85,809,240 3,603,688

Financial expenses 12 -10,327,043 -32,251,798

Result before taxes 215,085,208 158,439,921

Income taxes 13 -933,493 -610,740

Net result for the year 214,151,715 157,829,181

Annexe

Consolidated financial statements 2005 (IFRS)

60

CONSOLIDATED BALANCE SHEET

in CHF Note 31 December 2005 31 December 2004

Assets

Cash and cash equivalents 14 680,187,680 301,034,935

Derivative financial assets 15 162,706 24,907

Receivables 16 113,308,128 32,612,158

Prepaid expenses and accrued income 17 158,166,637 395,651,016

Current assets 951,825,151 729,323,016

Property, plant and equipment 18 244,882,554 122,015,603

Intangible assets 19 4,620,000 5,280,000

Financial assets 20 238,679,506 148,135,129

Non-current assets 488,182,060 275,430,732

Total assets 1,440,007,211 1,004,753,748

Liabilities and equity

Payables 21 37,972,791 24,952,164

Income tax liabilities 791,915 625,278

Interest-bearing liabilities 22 90,335,316 175,636,770

Derivative financial liabilities 15 6,243,971 53,856,088

Accrued expenses and deferred income 23 818,424,047 427,753,566

Current liabilities 953,768,040 682,823,866

Interest-bearing liabilities 22 12,000,000 83,096,923

Provisions 24 12,493,390 0

Deferred tax liability 13 1,001,370 1,001,370

Non-current liabilities 25,494,760 84,098,293

Total liabilities 979,262,800 766,922,159

Association capital 5,000,000 5,000,000

Hedging reserves 4,658,375 -4,102,733

Retained earnings 236,934,321 79,105,141

Net result for the year 214,151,715 157,829,181

Equity 25 460,744,411 237,831,589

Total liabilities and equity 1,440,007,211 1,004,753,748

61

CONSOLIDATED CASH FLOW STATEMENT

in CHF Note 2005 2004

Net result for the year 214,151,715 157,829,181

Depreciation and amortisation 5,455,121 5,548,739

Non-cash financial items -43,750,345 14,912,408

Income tax expenses 933,493 610,740

(Increase) / decrease in receivables -80,695,970 34,200,020

(Increase) / decrease in prepaid expenses and accrued income 237,981,936 -172,605,034

Increase / (decrease) in payables 13,020,628 -5,199,002

Increase / (decrease) in derivative financial assets and liabilities -47,749,917 5,484,421

Increase / (decrease) in accrued expenses and deferred income 390,649,076 140,584,456

Increase / (decrease) in provisions 12,493,390 0

Income tax paid -766,856 -2,003,242

Net cash provided by operating activities 701,722,271 179,362,687

Purchase of property, plant and equipment 18 -127,662,072 -27,941,359

Investment in financial assets 20 -66,078,875 -88,176,000

Repayments and sale of financial assets 20 0 38,279,531

Interest received 11 13,028,971 3,388,929

Income on investments (dividends/coupons) 11 2,235,840 1,769

Net cash (used)/provided by investing activities -178,476,136 -74,447,130

Repayment of interest-bearing liabilities 22 -178,103,578 -111,046,014

Interest paid -9,776,835 -10,453,903

Net cash used in financing activities -187,880,413 -121,499,917

Net increase/decrease in cash and cash equivalents 335,365,722 -16,584,360

Cash and cash equivalents as at 1 January 14 301,034,935 341,147,295

Effect of exchange rate fluctuations 43,787,023 -23,528,000

Cash and cash equivalents as at 31 December 14 680,187,680 301,034,935

Annexe

Consolidated financial statements 2005 (IFRS)

62

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Association Hedging Retained in CHF capital reserve earnings Total

Balance at 1 January 2004 5,000,000 10,086,843 79,105,141 94,191,984

Effective portion of changesin fair value of hedging instruments 0 -6,833,576 0 -6,833,576

Transferred to income statement 0 -7,356,000 0 -7,356,000

Net income recognised directly in equity 0 -14,189,576 0 -14,189,576

Net result for the year 2004 0 0 157,829,181 157,829,181

Total recognised income and expenses 0 -14,189,576 157,829,181 143,639,605

Balance at 31 December 2004 5,000,000 -4,102,733 236,934,322 237,831,589

Effective portion of changesin fair value of hedging instruments 0 5,508,364 0 5,508,364

Transferred to income statement 0 3,252,744 0 3,252,744

Net income recognised directly in equity 0 8,761,108 0 8,761,108

Net result for the year 2005 0 0 214,151,715 214,151,715

Total recognised income and expenses 0 8,761,108 214,151,715 222,912,823

Balance at 31 December 2005 5,000,000 4,658,375 451,086,036 460,744,411

63

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES

A. GENERAL INFORMATION ANDSTATEMENT OF COMPLIANCE

Fédération Internationale de Football Association (FIFA), domiciled in Zurich,Switzerland, is an international non-governmental, non-profit organisation inthe form of an association according to Swiss law. FIFA consists of 207 associa-tions affiliated to 6 confederations. FIFA’s primary mission is to promote thegame of association football in every way it deems fit. FIFA uses its profit,reserves and funds in pursuit of its primary mission.

FIFA prepares the consolidated financial statements in accordance withInternational Financial Reporting Standards (IFRS) and its interpretations adopt-ed by the International Accounting Standards Board (IASB).

B. BASIS OF PRESENTATION The consolidated financial statements are presented in Swiss francs (CHF) andare prepared on the historical cost basis, except that the following assets and lia-bilities are stated at fair value: derivative financial instruments and financialassets classified as “at fair value through profit and loss”.

C. BASIS OF CONSOLIDATION The term “FIFA” is hereafter also used for the consolidated group, which repre-sents FIFA and its subsidiaries.

Subsidiaries are those enterprises that are controlled by FIFA. Control exists whenFIFA has the power, directly or indirectly, to govern the financial and operatingpolicies of an enterprise so as to obtain benefits from its activities. The financialstatements of subsidiaries are included in the consolidated financial statementsfrom the date that control commences until the date that control ceases. Theindividual subsidiaries included in this consolidation are shown in note 34.

Intra-group balances and transactions, and any unrealised gains arising fromintra-group transactions, are eliminated in preparing the consolidated financialstatements. Unrealised losses are eliminated in the same way as unrealised gains,but only to the extent that there is no evidence of impairment.

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Consolidated financial statements 2005 (IFRS)

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D. FOREIGN CURRENCY TRANSLATION

a) Foreign currency transactions and balancesTransactions in foreign currencies are translated at the foreign exchange rate rul-ing on the date of the transaction. Monetary assets and liabilities denominatedin foreign currencies on the balance sheet date are translated at the foreignexchange rate ruling on that date. Foreign exchange differences arising fromtranslation are recognised in the income statement. Non-monetary assets andliabilities denominated in foreign currencies that are stated at fair value aretranslated at foreign exchange rates ruling on the dates the values were deter-mined.

b) Financial statements of foreign operationsFor FIFA’s foreign operations classified as a foreign entity, assets and liabilitiesincluding fair value adjustments arising on consolidation, are translated to Swissfrancs at foreign exchange rates ruling on the balance sheet date. The revenueand expenses of foreign operations are translated to Swiss francs on the aver-age foreign exchange rates of the period. Exchange differences arising on trans-lation of foreign entities are recognised directly in equity.

The foreign exchange rates used are as follows:

31 Dec 2005 Average 2005 31 Dec 2004 Average 2004

USD 1.3179 1.2380 1.1438 1.2525

EUR 1.5546 1.5585 1.5456 1.5527

GBP 2.2626 2.2736 2.1893 2.2785

E. INCOME STATEMENT The consolidated income statement has the following elements: event-relatedrevenue, event-related expenses, other operating income, development-relatedexpenses and other expenses. This structure reflects FIFA’s objectives to improvethe game of football constantly and promote it globally, particularly throughyouth and development programmes. Event-related revenue and expenses aredirectly related to the organisation and realisation of the FIFA World Cup™ andAdditional FIFA Events. For accounting purposes, FIFA defines Additional FIFAEvents as all other football events, such as the FIFA Women’s World Cup, FIFA U-20 World Cup, FIFA U-17 World Cup, FIFA U-20 Women’s World Cup,Olympic Football Tournaments, FIFA Futsal World Cup, FIFA Confederations Cup,FIFA Club World Cup etc.

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F. REVENUE RECOGNITION Event-related revenue primarily relates to the sale of the following rights:

• Television broadcasting rights• Marketing rights: use of the FIFA World Cup™ official emblem, the official

mascots, perimeter board advertising by Official Partners• Hospitality rights: commercial exploitation rights in relation to the FIFA

Hospitality Programme• Licensing rights: use of the FIFA brand

Under these revenue-generating contracts, FIFA receives royalties in the form ofguaranteed minimum payments and sales-based additional payments (profitshare).

Revenue directly related to the FIFA World Cup™ event is recognised in theincome statement using the percentage-of-completion method, if it can be esti-mated reliably. The stage of completion of the FIFA World Cup™ event isassessed as incurred evenly over the project preparation period, which is fouryears. While this generally applies to guaranteed minimum payments, addition-al sales-based revenue (profit share) is included in the percentage-of-completionmethod, when the amount is probable and can be measured reliably.

Revenue relating to Additional FIFA Events is deferred during the preparationperiod and is recognised in the income statement when the event takes place.

G. EVENT-RELATED EXPENSES Event-related expenses are the gross outflow of economic benefits that arise inthe ordinary activity of organising an event.

Since FIFA organises the FIFA World Cup™ event over a period of four years,expenses relating to the event are recognised based on the stage of completionof the event, as determined for event-related revenue recognition purposes.

During the four-year preparation period, differences between event-relatedexpenses recognised and event-related expenses incurred are disclosed in theincome statement as event-related accrued expenses and deferred expensesrespectively.

Expenses related to Additional FIFA Events are deferred during the preparationperiod, consistent with the treatment of related revenues, and are recognised inthe income statement in the period the event takes place.

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Consolidated financial statements 2005 (IFRS)

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H. DEVELOPMENT-RELATED EXPENSES

FIFA gives financial assistance to associations and confederations in return forpast or future compliance with certain conditions relating to their activities.During the current four-year period, FIFA is providing each association and con-federation with funds under the “Financial Assistance Programme” (FAP). TheGoal programme provides associations with special-needs funding for tailor-made projects. The expenses are recorded in the income statement on a straight-line basis over the project period, once FIFA has approved the project in ques-tion.

For other development projects, such as SOS Children’s Villages, Fair Play andprogrammes with the International Center for Sport Studies (CIES) at theUniversity of Neuchâtel in Switzerland etc., expenses are recognised as incurred.

I. OPERATING LEASE PAYMENTS Payments made under operating leases are recognised in the income statementon a straight-line basis over the term of the respective lease.

J. FINANCIAL EXPENSES ANDFINANCIAL INCOME

Financial income comprises interest income from interest-bearing receivablesand debt securities, dividend income, foreign exchange gains from financing andinvesting activities, gains on derivatives that are not accounted for as hedginginstruments, and gains arising from a change in the fair value of financial assetsclassified as trading or designated at fair value through profit and loss. Financialexpenses consist of interest on financial liabilities, foreign exchange losses fromfinancing and investing activities, losses on derivatives not accounted for ashedging instruments, and losses arising from a change in the fair value of finan-cial assets classified as trading or designated at fair value through profit and loss.

Interest income is recognised in the income statement using the effective inter-est method. Dividend income is recognised in the income statement on the datethat the dividend is declared. Borrowing costs are not capitalised.

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K. INCOME TAXES FIFA has been established in the legal form of an association pursuant to the arti-cles 60ff. of the Swiss Civil Code. Pursuant to article 2 of its Statutes, FIFA’sobjective is to improve the game of football constantly and promote it globally,particularly through youth and development programmes. FIFA is a non-profitorganisation and is obliged to spend its profits, reserves and funds for this pur-pose.

Income tax recognised in the income statement comprises current tax anddeferred tax.

FIFA is taxed in Switzerland according to the ordinary taxation rules applying toassociations. Thereby, the non-profit character of FIFA and the four-yearaccounting cycle are taken into account. FIFA Marketing & TV AG, a consolidat-ed group company, is taxed in Switzerland according to the rules applying to cor-porations. The other subsidiaries are also taxed according to the relevant tax leg-islation.

Current tax is the expected tax payable on the taxable income for the year usingordinary tax rates applicable to an association or a corporation, respectively.

L. CASH AND CASH EQUIVA-LENTS

Cash and cash equivalents comprise cash on hand, post accounts and bankaccounts, as well as short-term deposits with an original maturity of 90 days orless.

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Consolidated financial statements 2005 (IFRS)

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M. DERIVATIVES FIFA uses derivative financial instruments to hedge its exposure to foreignexchange and interest rate risks arising from operating and financing activities.FIFA does not hold or issue derivative financial instruments for trading purposes.However, derivatives that do not qualify for hedge accounting are accounted foras trading instruments.

Derivatives are initially recognised at fair value. Subsequent to initial recognition,all derivatives are also stated at fair value. Gains and losses on re-measurementof derivatives that do not qualify for hedge accounting are recognised in theincome statement immediately.

The fair value of interest rate swaps is the calculated amount that FIFA wouldreceive or pay to terminate the swap at the balance sheet date. The fair value offorward exchange contracts is their quoted market price at the balance sheetdate, being the present value of the quoted forward price.

N. HEDGING Where a derivative financial instrument hedges the exposure to variability infuture cash flows or highly probable forecasted transactions, the effective partof any gain or loss on re-measurement of the hedging instrument is recogniseddirectly in the hedging reserve as part of equity. The ineffective part of any gainor loss is recognised in the income statement immediately. The same accountingtreatment applies to cash balances and other monetary assets and liabilitiesdenominated in foreign currencies and designated as hedging instruments tohedge the variability in cash flows or highly probable forecasted transactions,caused by foreign exchange rate fluctuations.

The cumulative gain or loss recognised in equity is transferred to the incomestatement at the same time that the hedged transaction affects net profit or loss,and is included in the same line item as the hedged transaction.

When a hedging instrument or hedge relationship is terminated but the hedgedtransaction is still expected to occur, the cumulative gain or loss recognised inequity remains in equity and is recognised in accordance with the above policy.If the hedged transaction is no longer expected to occur, the cumulative gain orloss recorded in equity is recognised in the income statement immediately.

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O. RECEIVABLES Receivables from the sale of rights and other receivables are stated at amortisedcost, which equals nominal value for short-term receivables less any allowancefor doubtful debts. Allowances are made for specific known doubtful receiv-ables.

Accounts receivable and payable are offset and the net amount is reported inthe balance sheet when FIFA has a legally enforceable right to offset the recog-nised amounts and the transactions are intended to be settled on a net basis.

P. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at acquisition cost less accumulateddepreciation and impairment losses. Where parts of an item of property, plantand equipment have different useful lives, they are accounted for as separateitems of property, plant and equipment. Repairs and maintenance costs arerecognised in the income statement as an expense as incurred.

Depreciation is charged to the income statement on a straight-line basis over theestimated useful lives of property, plant and equipment. Land is not depreciat-ed. The estimated useful lives are as follows:

Buildings 20–40 years

Leasehold improvements 5 years

Office and other equipment 2–5 years

Q. INTANGIBLE ASSETS Intangible assets acquired by FIFA are stated at acquisition cost less accumulat-ed amortisation and impairment losses. Amortisation is charged to the incomestatement on a straight-line basis over the estimated useful lives unless lives areindefinite. The estimated useful lives are as follows:

Software 3 years

Film archive 10 years

Expenditure on internally generated goodwill and brands is recognised in theincome statement as an expense as incurred.

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Consolidated financial statements 2005 (IFRS)

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R. FINANCIAL ASSETS Financial assets comprise debt securities, equity securities and other receivables.

ClassificationLoans and receivables are those created by FIFA when providing money or serv-ices to third parties.

FIFA manages and evaluates the performance of its investments on a fair valuebasis in accordance with its documented investment strategy. Therefore theinvestments are classified as designated at fair value through profit and loss.Instruments include debt and equity investments.

Recognition and measurementFIFA recognises marketable securities and other investments at fair value, includ-ing transaction costs in the case of financial assets or financial liabilities not atfair value through profit and loss on settlement date (the date they are trans-ferred to FIFA). Loans and receivables are recognised when FIFA becomes a partyto the respective contract and has a legal right to receive cash or other consid-erations.

Subsequent to initial recognition, all investments at fair value through profit andloss are measured at fair value. Any instrument that does not have a quotedmarket price in an active market and for which fair value cannot be reliablymeasured is classified as available for sale and stated at cost less impairmentlosses.

Loans and receivables are measured at amortised cost less impairment losses.Amortised cost is calculated using the effective interest rate method. Premiumsand discounts, including initial transaction costs, are included in the carryingamount of the related asset and amortised based on the effective interest rateof the instrument. Allowances are made for specific known doubtful loans andreceivables.

Gains and losses on subsequent measurementGains and losses arising from changes in the fair value of a financial asset at fairvalue through profit and loss as well as any impairment losses on available-for-sale investments and loans and receivables are recognised in the income state-ment.

OffsettingFinancial assets and liabilities are offset and the net amount is reported in thebalance sheet when FIFA has a legally enforceable right to offset the recognisedamounts and the transactions are intended to be settled on a net basis.

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S. IMPAIRMENT The carrying amounts of FIFA’s property, plant and equipment, intangible assets,loans and other investments are reviewed at each balance sheet date to deter-mine whether there is any indication of impairment. If any such indication exists,the asset’s recoverable amount, being the greater of its fair value less costs tosell and its value in use, is estimated.

An impairment loss is recognised in the income statement whenever the carry-ing amount of an asset or its cash-generating unit exceeds the respective recov-erable amount.

An impairment loss in respect of an investment in an equity instrument classifiedas available for sale is not reversed through profit and loss.

An impairment loss in respect of loans and receivables and other assets isreversed if the impairment loss no longer exists and there has been a change inthe estimates used to determine the recoverable amount.

T. PAYABLES Payables are stated at amortised cost, which equals nominal value for short-termpayables.

U. INTEREST-BEARING LIABILITIES Interest-bearing liabilities are recognised initially at fair value, less attributabletransaction costs. Subsequent to initial recognition, interest-bearing liabilities arestated at amortised cost with any difference between cost and redemption valuebeing recognised in the income statement over the borrowing term on an effec-tive interest basis.

V. EMPLOYEE BENEFIT OBLIGATIONS

FIFA has established a retirement benefit plan for all its employees, which ismaintained by “Winterthur-Columna Stiftung für berufliche Vorsorge”. The planis funded by employee and employer contributions and has certain defined ben-efit characteristics. Accordingly, the plan is accounted for as a defined benefitplan. The financial impact of this plan on the consolidated financial statementsis determined based on the projected unit credit method.

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Consolidated financial statements 2005 (IFRS)

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Any pension surplus is only recognised as an asset if the asset embodies futureeconomic benefits that are actually available to FIFA in the form of refunds orreductions in future employer contributions.

Actuarial gains and losses arising from periodic reassessments are recognised tothe extent that they decrease or increase a pension deficit or pension surplusrespectively, if and to the extent that they exceed 10% of the higher of the pro-jected benefit obligation and the fair value of plan assets. The amount exceed-ing this “corridor” is amortised over the expected average remaining workinglives of the employees participating in the plan.

W. PROVISIONS A provision is recognised when FIFA has a legal or constructive obligation as aresult of a past event and it is probable that an outflow of economic benefits willbe required to settle the obligation. If the effect is material, provisions are deter-mined by discounting the expected future cash flows at a pre-tax rate thatreflects current market assessments of the time, value of money and, whereappropriate, the risks specific to the liability.

X. EQUITY Equity consists of association capital and retained earnings/losses, as well ashedging reserves and foreign currency translation gains/losses. FIFA is an associ-ation, therefore no dividends are paid.

In the event of the dissolution of FIFA, its funds shall not be distributed, buttransferred to the supreme court of the country in which the headquarter is sit-uated. The supreme court shall invest them in gilt-edged securities until the re-establishment of the federation.

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NOTES TO THE CONSOLIDATED INCOME STATEMENT

1 REVENUE FROM TELEVISION BROADCASTING RIGHTS

in CHF 2005 2004

Revenue from television broadcasting rights – 2006 FIFA World Cup™

- USA 50,200,688 36,056,115

- Europe 187,500,000 187,500,000

- Rest of the World 185,386,581 180,697,162

Total revenue from television broadcasting rights – 2006 FIFA World Cup™ 423,087,269 404,253,277

Revenue from television broadcasting rights – Additional FIFA Events 11,594,657 6,581,337

Total revenue from television broadcasting rights 434,681,926 410,834,614

The revenue from the territory “USA” contains the 2006 FIFA World Cup™ aswell as Additional FIFA Events related revenue. The television broadcasting rightsfor the USA are sold in a package that includes the FIFA World Cup™ andAdditional FIFA Events. FIFA is not in a position to allocate the revenue to the cor-responding event. Therefore, the full amount is classified as revenue relating tothe 2006 FIFA World Cup™.

Total contractual revenue for the 2006 FIFA World CupTM during the 2003 to2006 period includes revenue of USD 130 million for the territory “USA”,CHF 750 million for the territory “Europe” and CHF 750 million for the territory“Rest of the World”. Part of the revenue for the latter is collected in USD.

Due to the increase in value of the US dollar, income from the USA increasedcorrespondingly.

Total revenue in 2005 from television broadcasting rights for the 2006 FIFAWorld Cup™ of CHF 423,087,269 comprises revenue invoiced in 2005 ofCHF 571,364,145 adjusted for the reversal of accrued revenue byCHF 148,276,876. As at 31 December 2005 the accumulated revenue accruedduring the period from 2003 to 2005 but not yet invoiced amount toCHF 47,656,253 (2004: CHF 195,933,129).

Annexe

Consolidated financial statements 2005 (IFRS)

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2 REVENUE FROM MARKETING RIGHTS

in CHF 2005 2004

2006 FIFA World Cup™ 192,831,506 172,403,505

Total revenue from marketing rights 192,831,506 172,403,505

Total contractual revenue for the 2006 FIFA World CupTM during the 2003 to2006 period includes revenue of USD 359.8 million and CHF 188.9 million.

The revenue in 2005 from marketing rights comprises revenue collected in 2005of CHF 172,960,136 adjusted for the reversal of deferred revenues byCHF 3,765,680 and reduced by sales commissions of CHF 1,247,310. In addi-tion, the transfer from the hedging reserve to the income statement ofCHF 17,353,000 is also included. As at 31 December 2005, the accumulatedrevenue accrued over the period from 2003 to 2005 but not yet invoicedamount to CHF 13,544,630 (2004: CHF 17,310,310).

3 REVENUE FROM LICENSING RIGHTS

in CHF 2005 2004

2006 FIFA World Cup™ 14,283,829 13,223,134

Additional FIFA Events 83,720 60,997

Total revenue from licensing rights 14,367,549 13,284,131

Total contractual revenue for the 2006 FIFA World CupTM during the 2003 to2006 period includes revenue of CHF 58.9 million.

The revenue in 2005 from licensing rights included CHF 4,423,033(2004: CHF 6,761,093) accrued income due to the percentage-of-completionmethod. The accumulated accrual as at 31 December 2005 amounts toCHF 9,465,098 (2004: CHF 5,042,065).

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4 REVENUE FROM HOSPITALITY RIGHTS

in CHF 2005 2004

2006 FIFA World Cup™ 65,000,000 65,000,000

Total revenue from hospitality rights 65,000,000 65,000,000

Another important financial element of the 2006 FIFA World Cup™ is the hos-pitality programme. This involves the sale of VIP packages, i.e. tickets linked tospecial services, such as catering in the stadiums. This programme allows FIFA tofinance its funding of CHF 250 million for the German organising committee. In2003, FIFA appointed International Sports & Entertainment AG (iSe) as the ser-vicer of the hospitality programme. In return, iSe provided FIFA with a minimumpayment guarantee in the amount of CHF 270 million.

In 2005, iSe transferred the full guaranteed minimum payment of CHF 270 mil-lion to FIFA. The total revenue recognised in the 2005 income statement wasadjusted by the release of accruals made in previous years of CHF 130 million.An additional amount of CHF 65 million has been deferred and will be recog-nised as revenue in 2006.

For the four-year period 2003 to 2006, FIFA will register total revenue from thehospitality programme of CHF 260 million (excluding any potential profit-sharewith iSe, see note 29). Under a profit share agreement, the additional CHF 10million received from iSe belongs to the German organising committee for the2006 FIFA World CupTM.

Annexe

Consolidated financial statements 2005 (IFRS)

76

5 OTHER EVENT-RELATED REVENUE

in CHF 2005 2004

Accommodation and ticketing for 2006 FIFA World Cup™ 7,897,500 15,456,000

Revenue from the Olympic Games Athens 2004 852,199 14,872,959

Revenue from the Club World Championship Toyota Cup Japan 2005 30,244,871 0

Match levies 6,144,865 3,324,929

Other 365,201 7,212,990

Total other event-related revenue 45,504,636 40,866,878

In 2004, FIFA signed an agreement with the German organising committee,according to which FIFA receives a total of EUR 20 million for accommodationand ticketing for the 2006 FIFA World CupTM. As the percentage-of-completionmethod has to be applied to the four-year period (2003-2006), the revenuerecognised amounts to CHF 15,456,000 (50 %) in 2004 and CHF 7,897,500(25 %) in 2005.

FIFA has appointed Dentsu Inc. as the exclusive promoter and producer to imple-ment and stage the FIFA Club World Championship TOYOTA Cup until 2010 atits own cost and risk. FIFA has registered an amount of CHF 30,244,871 fromDentsu Inc. in order to cover its expenses in relation to this event.

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6 EVENT-RELATED EXPENSES

in CHF 2005 2004

2006 FIFA World Cup™ 252,809,716 223,303,799

Additional FIFA Events 82,789,482 30,662,336

Total event-related expenses 335,599,198 253,966,135

Expenses related to the 2006 FIFA World Cup™

in CHF 2005 2004

Compensation for teams and participants 18,392,943 13,475,975

Contributions to teams 32,000,000 0

Contributions to the German organising committee 65,000,000 20,000,000

Information technology 9,941,778 5,299,493

Rights protection – rights delivery 3,314,312 4,528,543

Insurance expenses 5,038,911 4,728,904

Other 38,416,482 12,351,006

Event-related expenses – accrued 80,705,290 162,919,878

Total expenses related to the 2006 FIFA World Cup™ 252,809,716 223,303,799

For the year ended 31 December 2005, the event-related expenses for the 2006FIFA World Cup™ of CHF 252.8 million include CHF 80.7 million in accruedevent-related expenses. These accruals are calculated according to the stage ofcompletion of the FIFA World Cup™ event on the basis of adjusted overall bud-geted costs of CHF 871 million for the 2006 FIFA World Cup™. The World Cupbudget is reviewed on an annual basis. The last review was conducted inDecember 2005 and led to a small increase in the budget from the CHF 869 mil-lion agreed in 2004 to CHF 871 million. Other event-related expenses include,amongst others, the cost of the 2006 FIFA World Cup Gala.

Annexe

Consolidated financial statements 2005 (IFRS)

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Accounting estimates and judgementsExpenses related to the 2006 FIFA World CupTM are recognised based on thestage of completion of the event (see accounting policy G. Event-related expens-es). Event-related expenses for the whole four-year period must be estimated inorder to calculate the total for the given stage of completion. This is achieved byregular, systematic reviews of every event-related project. Identifiable cost over-runs or cost savings are included in the total cost estimate for the event. Therecognition of expenses is adjusted accordingly.

Expenses related to Additional FIFA Events

in CHF 2005 2004

FIFA Confederations Cup Germany 2005 27,904,666 0

FIFA World Youth Championship Netherlands 2005 12,216,518 0

FIFA U-17 World Championship Peru 2005 11,703,996 0

FIFA Club World Championship TOYOTA Cup Japan 2005 29,947,975 0

Olympic Football Tournaments Athens 2004 0 12,332,115

FIFA U-19 Women’s World Championship Thailand 2004 0 7,390,971

FIFA Futsal World Championship Chinese Taipei 2004 0 8,309,135

Blue Stars / FIFA Youth Cup 604,969 555,565

Other events 411,358 2,074,550

Total expenses related to Additional FIFA Events 82,789,482 30,662,336

The FIFA Confederations Cup was held in June 2005 in Germany, the FIFA WorldYouth Championship was held in June/July 2005 in the Netherlands, the FIFA U-17 World Championship was held in September/October 2005 in Peruand the FIFA Club World Championship TOYOTA Cup was held in December2005 in Japan.

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7 OTHER OPERATING INCOME

in CHF 2005 2004

Brand licensing 20,904,340 20,048,696

Quality concept 6,038,213 5,953,047

Rental income 766,530 626,971

Penalties / appeals 3,856,478 2,896,867

Income from sale of film and video rights 1,380,492 1,283,009

Commissions 695,669 764,587

Other 1,938,173 2,063,071

Total other operating income 35,579,895 33,636,248

Brand licensing includes proceeds from an agreement with adidas for the supplyof equipment amounting to CHF 10 million reflecting the payments laid downin the renewed agreement for the 2003-2006 period.

Annexe

Consolidated financial statements 2005 (IFRS)

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8 DEVELOPMENT-RELATED EXPENSES

in CHF 2005 2004

Financial Assistance Programme (FAP) 79,328,788 79,761,043

Goal 25,000,000 25,000,000

Contributions to confederations 23,038,239 22,771,500

Other projects 11,881,913 12,926,625

Total development-related expenses 139,248,940 140,459,168

FAP and contributions to confederationsFAP is a financial aid programme, under which USD 1 million is to be granted toeach association and USD 10 million to each confederation over the currentfour-year period preceding the 2006 FIFA World Cup™, to improve their admin-istrative and technical infrastructure (see accounting policy H. Development-related expenses).

FIFA grants this assistance for projects that fulfil the following objectives:

• Develop and implement a modern, efficient and functional administrative orsports infrastructure;

• Facilitate the recruitment, training and remuneration of administrative andtechnical staff employed by the association;

• Promote youth football;• Provide basic and further training for association staff and members, as well

as others seconded to the associations for administrative and technicalduties;

• Promote technical and sports development;• Support associations in arranging and taking part in official football compe-

titions.

The total annual FAP awards amount to USD 51 million for the year 2005.

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GoalGoal is a development programme created by FIFA for the benefit of associationswith special needs. Goal offers funding for projects tailor-made to suit the indi-vidual needs of the associations in the following areas:

• Administration – the set-up of national and regional associations, includingstaff and office equipment.

• Training – administration, coaching, refereeing, sports medicine.• Youth football – training youth team coaches, regional and national youth

training centres and football schools, talent promotion.• Infrastructure – the renovation and construction of football pitches, physical

training and tuition centres, office buildings.• Other tailor-made development projects – projects catering to other specific

needs of associations may also be considered if deemed appropriate.

The maximum amount that can be awarded per project is limited toUSD 400,000. As at 31 December 2005, funds committed but not yet paid outto Goal projects amounted to CHF 46.5 million. These commitments are recog-nised and stated under accrued expenses.

Other projectsOther contributions primarily include contributions to the technical developmentefforts made by FIFA, such as SOS Children’s Villages, the Humanitarian SupportFund, courses, CIES, Daniel Nivel Foundation, Com-Unity, F-MARC, UNICEF andrefereeing.

CIES Together with the International Center for Sport Studies (CIES) at the Universityof Neuchâtel in Switzerland, FIFA has set up two special programmes: a Mastersdegree in the Business, Law and Humanities of Sports and a scholarship(“Havelange Scholarship”). FIFA allocates CHF 500,000 to the HavelangeScholarship every year as well as an annual contribution of CHF 350,000 to theCIES Master programme.

Annexe

Consolidated financial statements 2005 (IFRS)

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9 PERSONNEL EXPENSES

in CHF 2005 2004

Wages and salaries 31,765,256 31,788,228

Pension expenses 6,015,007 4,966,493

Post employment benefits for Executive Committee members 12,493,390 0

Other employee benefit costs 2,879,592 4,844,889

Other 8,027,868 7,773,635

Total personnel expenses 61,181,113 49,373,245

The average number of employees during the year ended 31 December 2005was 251 (2004: 240).

The increase in FIFA’s personnel expenses relates to a decision by the FIFAExecutive Committee as of 7-8 March 2005 to introduce a retirement plan forExecutive Committee members. The introduction of this retirement plan result-ed in provisions of CHF 12,493,390 million being set aside by the end of 2005(see note 24).

Under this retirement plan, Executive Committee members receive pension pay-ments when they have served as a member of the committee for 8 or moreyears. Pension is paid for up to a maximum of the number of years that themember served on the committee.

The pension plan for FIFA employees is funded by employee and employer con-tributions. Since the plan has certain defined benefit characteristics, the figurespresented below have been determined according to the defined benefit planaccounting provisions of IAS 19.

Components of pension expenses

in CHF 2005 2004

Current service cost 6,429,313 3,605,523

Interest on obligation 908,108 1,074,473

Expected return on plan assets -1,059,895 -785,107

Unrecognised employer contributions 1,381,800 2,400,000

Subtotal 7,659,326 6,294,889

Contributions by employees -1,644,319 -1,328,396

Total pension expense 6,015,007 4,966,493

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Funded status

in CHF 2005 2004

Present value of funded obligations (PBO) 40,235,703 27,588,786

Fair value of plan assets -47,052,674 -38,861,611

Unrecognised actuarial gains 2,470,614 7,262,740

Unrecognised pension fund surplus 4,346,357 4,010,085

Recognised pension liability/(asset) 0 0

The actual annual return on plan assets for the year ended 31 December 2005amounted to CHF 1,122,709 (2004: CHF 682,000)

As the pension fund surplus is not available to FIFA in the form of refunds orreductions in future employer contributions, no pension asset has been recog-nised as at the balance sheet date.

Principal actuarial assumptions

31 December 2005 31 December 2004

Discount rate 3.25% 4.00%

Expected rate of return on plan assets 2.25% 2.25%

Future salary increases 1.00% 1.00%

Future pension increases 1.00% 1.00%

Accounting estimates and judgementsThe rates and parameters applied above are based on past experiences. Futuredevelopments in capital and labour markets could make adjustments of suchrates necessary which could significantly affect the calculation of pension obli-gations.

Annexe

Consolidated financial statements 2005 (IFRS)

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10 OTHER OPERATING EXPENSES

in CHF 2005 2004

External consultancy expenses 9,496,958 9,509,598

Event consultancy expenses 14,992,147 14,437,175

Legal expenses and consultancy 11,546,935 11,972,086

New Media expenses and consultancy 6,155,235 4,736,587

Rent of property 3,509,482 3,951,797

Office equipment and telecommunication costs 3,759,964 4,243,487

PR and promotional costs 7,064,788 6,049,081

Acquisition and production costs 7,094,676 2,747,192

Other 15,031,868 13,255,442

Total other operating expenses 78,652,053 70,902,445

11 FINANCIAL INCOME

in CHF 2005 2004

Interest income 13,526,538 3,388,929

Foreign exchange gains 53,339,402 177,102

Gains on currency derivatives 16,705,431 0

Total foreign currency gains 70,044,833 177,102

Gains on investments designated at fair value through profit and loss 2,237,869 37,657

Total income from investments 2,237,869 37,657

Total financial income 85,809,240 3,603,688

The increase in interest income is due to an increase of both cash balances andinterest rates in 2005.

The foreign exchange gains result mainly from the valuation of current assets inUS dollars due to the higher USD/CHF exchange rate.

The gains on currency derivatives result primarily from the valuation of USD cur-rency derivatives due to the higher USD/CHF exchange rate.

85

12 FINANCIAL EXPENSES

in CHF 2005 2004

Interest expenses on loans and mortgages 9,798,237 10,453,903

Loss on interest rate derivatives 21,703 269,276

Total interest expenses 9,819,940 10,723,179

Foreign exchange loss 507,103 18,575,460

Loss on currency derivatives 0 2,953,159

Total foreign currency loss 507,103 21,528,619

Total financial expenses 10,327,043 32,251,798

The interest cost reflects principally the interest paid on the Footfin funding loan(CHF 7.3 million) and FIFA’s mortgage loans (CHF 2.5 million).

Annexe

Consolidated financial statements 2005 (IFRS)

86

13 INCOME TAXES

in CHF 2005 2004

Current tax expense 933,493 610,740

Total income tax expense 933,493 610,740

There were no income taxes directly recognised in equity.

FIFA is taxed based on the Swiss taxation rules for an association.

FIFA has a deferred tax liability due to the temporary difference between the val-uation of the taxable value and the IFRS carrying amount of FIFA’s properties(property gain taxes). These deferred tax liabilities amounted to CHF 1.0 millionas at 31 December 2005, as in the previous year.

Because FIFA is a non-profitmaking organisation, it is obliged to spend its prof-its reserves and funds on the development of football and, as a result of the four-year accounting cycle, the yearly results should not be assessed on a stand-alonebasis. Therefore, an effective tax rate reconciliation to consolidated profitsbefore taxes would not be meaningful. Consequently, this calculation has notbeen carried out. There are no tax loss carry-forwards.

87

NOTES TO THE CONSOLIDATED BALANCE SHEET

14 CASH AND CASH EQUIVALENTS

Weighted Weightedaverage average

in CHF 31 Dec 2005 interest rate 31 Dec 2004 interest rate

Cash on hand, post and in bank accounts 310,759,930 1.85% 33,322,867 0.40%

Overnight deposits and fixed term deposits with maturities of up to 3 months 369,427,750 2.83% 267,712,068 2.17%

Cash and cash equivalents 680,187,680 301,034,935

The fixed term deposits have an average maturity of 45 days.

UBS AG, Zurich, has guaranteed an amount of CHF 670,000 for IATA, Kloten,on behalf of FIFA Travel GmbH for security services rendered by IATA. Conversely,FIFA has pledged CHF 680,118 from its cash balances to UBS in relation to thisguarantee.

To a large extent, cash and cash equivalents are denominated in USD (seenote 26). As a result of the increased USD/CHF exchange rate during 2005, FIFAincurred net foreign exchange gains on cash and cash equivalents. To the extentthat such foreign exchange gains and losses qualify for hedge accounting undereffective cash flow hedges, they are directly recognised in equity. The remainingforeign exchange gains and losses are recognised as financial income andexpenses respectively.

Annexe

Consolidated financial statements 2005 (IFRS)

88

15 DERIVATIVE FINANCIAL ASSETS AND LIABILITIES

31 Dec 2005 31 Dec 2004

Positive fair Negative fair Notional Positive fair Negative fair Notionalin CHF value value amount value value amount

Fair value hedges

- Interest rate swap 3,204 0 65,335,316 24,907 0 188,689,283

Cash flow hedges

- Foreign currency options (USD) 0 0 0 0 20,291,161 50,000,000

- Forward rate agreements (USD) 0 6,243,970 27,915,000 0 22,884,700 69,245,000

Other derivative financial instruments

- Foreign currency put options (USD) 0 0 0 0 10,680,228 100,000,000

- Foreign currency put options (EUR) 159,502 0 38,000,000 0

Total 162,706 6,243,970 24,907 53,856,089

These hedging contracts are described in more detail in note 26.

89

16 RECEIVABLES

in CHF 31 December 2005 31 December 2004

Receivables from exploitation of rights 88,271,894 12,469,277

Other receivables

- Due from member associations and confederations 12,286,283 14,804,963

- Due from related parties 365,647 46,562

- Due from third parties 10,866,154 4,386,356

Fixed-term bank deposits with maturity of greater than 3 months 805,000 805,000

Short-term loans

- Due from third parties 713,150 100,000

Total receivables, net 113,308,128 32,612,158

As at 31 December 2005, receivables from the exploitation of rights comprisemainly receivables from FIFA’s TV partner, Infront Sports & Media AG, ofCHF 44.3 million (2004: CHF 9.3 million), and receivables of CHF 27.8 millionfrom television broadcasting rights for the post-2006 period.

The other receivables due from third parties are ordinary operating receivables.The receivables are shown net of impairment losses amounting to CHF 2.5 mil-lion.

FIFA Marketing & TV AG has pledged a term deposit with Credit Suisse for theamount of CHF 805,000 as a guarantee for the rental of its offices atGrafenauweg 2 in Zug.

Annexe

Consolidated financial statements 2005 (IFRS)

90

17 PREPAID EXPENSES AND ACCRUED INCOME

in CHF Note 31 December 2005 31 December 2004

Revenue from television broadcasting rights (POC accrual) 1 47,656,253 195,933,129

Accrued income for Additional FIFA Events 33,227,621 4,431,203

Prepayments to the South African Organising Committee 25,180,000 22,876,000

Prepayments for the 2006 FIFA World Cup™ 16,982,365 0

Prepaid expenses for Additional FIFA Events 9,529,564 17,526,786

Revenue from licensing rights (POC accrual) 3 9,465,098 5,042,065

Revenue from accommodation and ticketing (POC accrual) 5 7,761,500 15,456,000

Revenue from hospitality rights (POC accrual) 4 0 130,000,000

Other 8,364,236 4,385,833

Total prepaid expenses and accrued income 158,166,637 395,651,016

The accrued income for Additional FIFA Events of CHF 33,227,621 mainly con-sists of the accrued income from the FIFA Club World Championship TOYOTACup 2005 (see note 5).

The prepayments to the organising committee for the 2010 FIFA World CupSouth AfricaTM of CHF 25,180,000 reflect the seed capital provided by FIFA.

91

18 PROPERTY, PLANT AND EQUIPMENT

Buildings Office under Leasehold and other

in CHF Buildings construction Land improvements equipment Total

Cost

Balance as at 1 January 2004 71,660,265 6,719,481 21,395,592 460,500 6,982,388 107,218,226

Acquisitions 2004 0 27,915,696 25,662 0 0 27,941,358

Disposals 2004 0 0 0 0 0 0

Balance as at 31 Dec 2004 71,660,265 34,635,177 21,421,254 460,500 6,982,388 135,159,584

Acquisitions 2005 10,273,933 117,388,139 0 0 0 127,662,072

Disposals 2005 0 0 0 0 0 0

Balance as at 31 Dec 2005 81,934,198 152,023,316 21,421,254 460,500 6,982,388 262,821,656

Accumulated depreciation

Balance as at 1 January 2004 3,487,468 0 0 237,925 4,529,850 8,255,243

Depreciation 2004 3,585,048 0 0 100,000 1,203,690 4,888,738

Disposals 2004 0 0 0 0 0 0

Balance as at 31 Dec 2004 7,072,516 0 0 337,925 5,733,540 13,143,981

Depreciation 2005 4,114,411 0 0 100,000 580,710 4,795,121

Disposals 2005 0 0 0 0 0 0

Balance as at 31 Dec 2005 11,186,927 0 0 437,925 6,314,250 17,939,102

Carrying amount

As at 1 January 2004 68,172,797 6,719,481 21,395,592 222,575 2,452,538 98,962,983

As at 31 December 2004 64,587,749 34,635,177 21,421,254 122,575 1,248,848 122,015,603

As at 31 December 2005 70,747,271 152,023,316 21,421,254 22,575 668,138 244,882,554

The acquisitions made in 2004 and 2005 relate mainly to the construction costsfor the “Home of FIFA”, the new FIFA headquarters in Zurich. The opening ofthe new “Home of FIFA” is planned for the end of April 2006.

Mortgage loans amounting to CHF 37 million are secured by land and buildingspledged, with a carrying amount of CHF 65,938,826.

The fire insurance value amounts to CHF 58,287,900 for buildings andCHF 17,300,000 for office equipment and other equipment.

Annexe

Consolidated financial statements 2005 (IFRS)

92

19 INTANGIBLE ASSETS

Footagein CHF Software archive Total

Cost

Balance as at 1 January 2004 77,020 6,600,000 6,677,020

Balance as at 31 December 2004 77,020 6,600,000 6,677,020

Balance as at 31 December 2005 77,020 6,600,000 6,677,020

Accumulated amortisation

Balance as at 1 January 2004 77,020 660,000 737,020

Amortisation 2004 0 660,000 660,000

Balance as at 31 December 2004 77,020 1,320,000 1,397,020

Amortisation 2005 0 660,000 660,000

Balance as at 31 December 2005 77,020 1,980,000 2,057,020

Carrying amount

As at 1 January 2004 0 5,940,000 5,940,000

As at 31 December 2004 0 5,280,000 5,280,000

As at 31 December 2005 0 4,620,000 4,620,000

93

20 FINANCIAL ASSETS

in CHF 31 December 2005 31 December 2004

Debt securities 226,004,000 137,564,000

Equity securities 267,734 185,360

Other 12,407,772 10,385,769

Total financial assets 238,679,506 148,135,129

The investment in capital-protected participations and capital-guaranteed partic-ipations are considered structured investments similar to debt securities that limitFIFA’s risk of fair value losses, but offer FIFA the chance of market value appreci-ation of the investment. Interest payments are generally due upon the redemp-tion of the investments between 2007 and 2014.

All debt securities and equity securities are classified as designated at fair valuethrough profit and loss and are therefore stated at fair value.

Other receivables comprise a payment from a broadcasting partner due to a set-tlement and restatement agreement signed with Infront Sports & Media AG inMay 2004. The receivable is measured in amortised costs.

21 PAYABLES

in CHF 31 December 2005 31 December 2004

Other payables

- Due to related parties 353,920 254,065

- Due to member associations and confederations 21,626,666 7,086,336

- VAT payable 4,886,582 7,304,722

- Due to third parties 11,105,623 10,307,040

Total payables 37,972,791 24,952,164

Annexe

Consolidated financial statements 2005 (IFRS)

94

22 INTEREST-BEARING LIABILITIES

in CHF 31 December 2005 31 December 2004

Current:

Bank overdrafts 0 44,410

Short-term bank loan 0 25,000,000

Liability from securitisation transaction towards third party investors 65,335,316 150,592,360

Mortgage loans 25,000,000 0

Total current interest-bearing liabilities 90,335,316 175,636,770

Non-current:

Liability from securitisation transaction towards third party investors 0 38,096,923

Mortgage loans 12,000,000 45,000,000

Total non-current interest-bearing liabilities 12,000,000 83,096,923

Total interest-bearing liabilities 102,335,316 258,733,693

In 2001, FIFA issued a floating rate note (Libor +0.9%) of CHF 690 millionthrough its special purpose vehicle “SPV” Footfin (Football Finance) AG. Thenote is secured by future cash flows amounting to CHF 888 million generatedby FIFA from the granting of marketing rights packages to Official Partners forFIFA-organised events during the quadrennial periods ending with the 2002 and2006 FIFA World Cup™ finals. Until 2003, the note was redeemed by way ofdirect payments to Footfin (Football Finance) AG by the Official Partners.

In October 2003, the redemption schedule of the note was changed. This result-ed from the fact that FIFA entered into agreements with Official Partners earlierthan initially expected, allowing FIFA to take out additional liquidity of USD 69.4million or CHF 91.6 million under the same transaction.

95

Terms and debt repayment schedule

Weighted averagein CHF interest rate Total 1 year or less 1-5 years

Loans:

Liability from securitisation transactiontowards third party investors (variable interest at Libor +0.9%) 3.58% 65,335,316 65,335,316 0

Mortgage loans 2.80% 37,000,000 25,000,000 12,000,000

Total 102,335,316 90,335,316 12,000,000

The mortgage loans are secured by land and buildings with a carrying amountof CHF 65,938,826.

23 ACCRUED EXPENSES AND DEFERRED INCOME

in CHF Note 31 December 2005 31 December 2004

Accrued expenses due to application of the percentage-of-completion method 6 394,738,612 314,033,322

Deferred revenue from television broadcasting rights beyond 2006 167,099,800 0

Financial Assistance Programme (FAP) / Goal 8 83,519,905 71,940,147

Deferred revenue from hospitality rights (POC accrual) 4 65,000,000 0

Accrued expenses for Additional FIFA Events 23,687,781 0

Deferred revenue from rights beyond 2006 20,920,400 0

Deferred revenue from marketing rights (POC accrual) 2 13,544,630 17,310,310

Deferred revenue share from hospitality rights 4 10,000,000 0

Deferred revenue from brand licensing rights 8,568,396 0

Other 31,344,523 24,469,787

Total accrued expenses and deferred income 818,424,047 427,753,566

The deferred revenue from television broadcasting rights beyond 2006 ofCHF 167,099,800 results from the commercialisation of rights for the 2010 FIFAWorld CupTM.

The deferred revenue from rights beyond 2006 of CHF 20,920,400 results fromthe commercialisation of marketing and brand rights for the 2010 FIFA WorldCupTM.

Annexe

Consolidated financial statements 2005 (IFRS)

96

24 PROVISIONS

Post employment benefits for membersin CHF of the Executive Committee

Balance as at 1 January 2004 0

Balance as at 31 December 2004 0

Balance as at 1 January 2005 0

Provisions made during the year 12,493,390

Balance as at 31 December 2005 12,493,390

The provisions of CHF 12,493,390 set aside in 2005 follow on from the decisionreached by the FIFA Executive Committee on 7-8 March 2005 to introduce aretirement plan for Executive Committee members. An annual retirement pay-ment will be made to long-serving FIFA Executive Committee members whoretire in 2005 or thereafter. Only the FIFA Executive Committee member maybenefit from this scheme. Family members or relatives of the ExecutiveCommittee member are not entitled to receive any payments. The retirementpayments will start in the FIFA financial year following retirement.

There are no other legal or constructive obligations that qualify for establishingrespective provisions.

25 EQUITY

Association capitalThe association capital is CHF 5 million.

Hedging reserveThe hedging reserve comprises the effective portion of the cumulative netchange in the fair value of cash-flow hedging instruments where the hedgedtransaction has not yet occurred.

97

OTHER DISCLOSURES

26 RISK MANAGEMENT AND HEDGING ACTIVITIES

Exposure to currency and interest as well as credit and liquidity risks arises in thenormal course of FIFA’s operations. Derivative financial instruments are used toreduce exposure to fluctuations in foreign currency exchange rates and interestrates. While these instruments are subject to the risk of market rate fluctuationssubsequent to acquisition, such fluctuations are generally offset by oppositeeffects on the items being hedged.

Credit riskFIFA sells the licence to exploit the radio and television rights to the FIFA WorldCup™ to Infront Sports & Media AG, and the marketing rights to OfficialPartners.

The Official Partner agreements are made with large multinational groups.Additionally, the contracts include a default clause, whereby the contract wouldterminate as soon as one party is in default. In the event of an Official Partnerdefaulting, FIFA is not required to reimburse any of the services and contribu-tions received. FIFA is also entitled to replace terminated contracts with newmarketing or broadcasting agreements.

The FIFA management monitors the credit standing of its marketing and broad-casting partners very closely on an ongoing basis. Given their good creditratings, the FIFA management does not expect any counter-party to fail to meetits obligation.

Investments and derivative financial instruments are executed only with counter-parties with high credit ratings.

Interest rate riskExposure to interest rate risks arises mainly from FIFA financing transactions.

FIFA entered into an interest rate swap to limit its interest rate risk exposure relat-ed to the liability from the securitisation transaction towards third party investors(“Funding Loan”). The interest rate swap has a rate of 6%, matures over thenext four years following the maturity of the related funding loan and has anotional contract amount of CHF 65 million (2004: CHF 189 million). The fairvalue of the interest rate swap as at 31 December 2005 is CHF 3,204 (2004:CHF 24,907).

FIFA has several mortgage loans, some with fixed interest rates, some floatingrates and others with an interest rate cap.

Annexe

Consolidated financial statements 2005 (IFRS)

98

Additionally, FIFA is exposed to fluctuations in interest rates on its short-termplacements in fixed-term deposits and mid-term investments in global moneymarket funds.

Foreign currency riskExposure to foreign currency exchange rates arises from transactions denominat-ed in currencies other than FIFA’s functional currency, which is the Swiss franc.FIFA incurs foreign currency cash inflows in the form of revenue from the sale ofcertain rights denominated in USD, as well as foreign currency cash outflowssuch as certain event-related expenses and expenses for development projects.

FIFA uses forward exchange contracts and currency options to hedge certain for-eign currency risk. Options limit the risk of losses from fluctuations in exchangerates.

FIFA also designates cash and cash equivalents denominated in USD as hedginginstruments for the foreign currency risk of specified expenses in the currentfour-year period preceding the 2006 FIFA World Cup™.

Additionally, the “Funding Loan” denominated in USD is designated as a hedg-ing instrument for future USD receivables from the exploitation of marketingrights.

99

Foreign currency risk

Expected periodHedging of recognition in

in CHF Nominal value reserve* income

Foreign currency hedging instruments (cash flow hedge)

- “Funding Loan” denominated in USD 49,575,321 13,956,476 2006

- Cash denominated in USD 86,000,000 -9,298,100 2006

Total 4,658,376

*Amounts to be recognised in income when the forecasted transaction occurs

The following table shows the balance sheet items that are denominated in a foreign currency as at 31 December 2005.

in thousands USD EUR GBP

Cash and cash equivalents 255,299 40,388 106

Derivatives 0 0 0

Receivables 25,908 32,387 31

Prepaid expenses 20,032 0 0

Financial assets 150,000 15,000 0

Total assets denominated in foreign currency 451,239 87,775 137

Payables 984 538 173

Current interest-bearing liabilities 0 0 0

Derivatives 4,735 0 0

Accrued expenses and deferred income 25,396 18,125 0

Non-current interest-bearing liabilities 59,055 0 0

Total liabilities denominated in foreign currency 90,170 18,663 173

Liquidity riskMaterial liquidity risks could potentially arise if Infront Sports & Media AG or sev-eral of FIFA’s Official Partners were unable to meet their contractual obligationsand if FIFA was unable to find a replacement in due time.

Annexe

Consolidated financial statements 2005 (IFRS)

100

27 LEGAL MATTERS AND CONTINGENT LIABILITIES

There are no material legal matters and no information to be disclosed.

28 CAPITAL COMMITMENTS

As at 31 December 2005, FIFA had no capital commitments.

29 CONTINGENT REVENUE

FIFA has negotiated with Infront Sports & Media AG the following contingentrevenue:

• If the revenue from the exploitation of the radio and television broadcastingrights for the FIFA World Cup™ exceeds the guaranteed minimum pay-ments, FIFA is eligible to receive 50% of the exceeding revenue less certainpredetermined costs of Infront Sports & Media AG. With respect to the 2006FIFA World Cup™, FIFA expects to earn income from this profit-share agree-ment in the year 2006.

FIFA has entered into an agreement with iSe (International Sports &Entertainment AG) which includes the following contingent revenue:

• FIFA will receive a 70% profit share of total hospitality revenue exceedingCHF 270 million and up to CHF 360 million. If the revenue exceeds CHF 360million, FIFA will receive 65% of the profit share.

FIFA has entered into marketing contracts with Yahoo! and Electronic Arts whichinclude the following contingent revenue arrangements:

• FIFA shall retain 40% of all revenue generated directly from the operation ofthe FIFA World Cup™ website exceeding the threshold amount of USD 8.5million.

• Electronic Arts pays FIFA royalties in addition to the agreed amount of 5.5%of all net invoiced billings for the FIFA Brand Licence and the FIFA WorldCup™ Licence exceeding USD 1.6 billion.

101

In July 2004, FIFA signed the Second Amendment to the Organising AssociationAgreement (OAA), which includes the following contingent revenue arrange-ments:

• 50% of overall ticketing/accommodation profits in excess of the first EUR 20million will be paid to FIFA by the organising committee. FIFA’s share of theadditional overall ticketing/accommodation profit will be due and payable inaccordance with the terms and conditions of the OAA three months afterthe final match of the 2006 FIFA World CupTM.

• 40% of the overall profit in excess of the threshold amount of the firstCHF 50 million will be paid to FIFA by the organising committee. FIFA’s shareof the overall profit of the organising committee will be due and payable toFIFA by the organising committee in accordance with the terms and condi-tions of the OAA three months after the final match of the 2006 FIFA WorldCupTM.

30 VALUE-IN-KIND REVENUE

Value-in-kind revenue from partners is not recognised in the income statementdue to the fact that the fair value of the revenue cannot be measured reliablyand local organising committees are the actual beneficiaries of the value in kind.

FIFA has value-in-kind agreements with the following companies: adidas,Anheuser-Busch, Avaya, Coca-Cola, Deutsche Telekom, Fujifilm, Hyundai, Philipsand Yahoo! The counter-parties have agreed to deliver a predetermined quanti-ty of products or services to local organising committees to be used during theFIFA World Cup™ or Additional FIFA Events.

Annexe

Consolidated financial statements 2005 (IFRS)

102

31 OPERATING LEASES

Non-cancellable operating lease rentals are payable as follows:

in CHF 31 December 2005 31 December 2004

Less than 1 year 776,782 890,383

1-5 years 200,244 468,297

Total 977,026 1,358,680

FIFA leases office space, vehicles and office equipment under operating leases.The leases typically extend over an initial period of between one and five years,with an option to renew the lease after that date. None of the leases includecontingent rentals.

During 2005, CHF 1,406,474 (2004: CHF 1,003,700) was recognised as anexpense in the income statement in respect of operating leases.

32 RELATED PARTY TRANSACTIONS

Identity of related partiesFIFA as an association has 207 associations as its members. The associations affil-iated to FIFA and geographically situated on the same continent form confeder-ations. Additionally, from the perspective of FIFA, the following persons areregarded as related parties: members of the Executive Committee and FinanceCommittee, other key management personnel as well as the Honorary President.

Transactions with related partiesEach member of FIFA must pay an annual subscription fee, currently CHF 300,and for every international match – including friendly matches, tournaments andall the matches of the Olympic Football Tournaments – played between twointernational “A” teams, the association of the country in which the match isbeing played pays a share of the gross receipts of the match to FIFA. Revenuefrom international matches totalled CHF 6.1 million in 2005 (2004: CHF 3.3 mil-lion).

FIFA makes yearly contributions (FAP, Goal) to the associations and confedera-tions to support their efforts in promoting and developing football in their region(see note 8). These development expenses totalled CHF 122.6 million in 2005(2004: CHF 127.5 million). The accumulated development expenses accrued asper 31 December 2005 totalled CHF 83.5 million (2004: CHF 71.9 million).

103

FIFA organises the FIFA World Cup™ and Additional FIFA Events. In connectionwith these competitions, FIFA offers financial support to local organising com-mittees, compensates teams for travel and accommodation expenses and paysprize money. For the FIFA World Cup™, the qualifying teams receive compensa-tion to cover the cost of their preparations. In 2005, FIFA paid CHF 126.5 millionto local organising committees and member associations (2004: CHF 27.3 mil-lion).

The Honorary President fulfils representative functions for FIFA. He is reimbursedfor his travel and accommodation expenses and receives a daily allowance whileon FIFA business.

FIFA has outstanding receivables from related parties amounting to CHF 39 mil-lion (2004: CHF 37.7 million), while outstanding payables total CHF 21.9 million(2004: CHF 7.3 million).

Key management personnelMembers of the Executive Committee, the Finance Committee and the FIFAmanagement are regarded as key management personnel. In 2005, short-termemployee benefits of CHF 15.5 million were paid to the key management per-sonnel (2004: CHF 15.8 million).

In addition to these short-term employee benefits, FIFA contributes to post-employment defined benefit plans. The recognised post-employment benefitexpenses in 2005 amounted to CHF 13.1 million (2004: CHF 0.6 million). Theincrease in these expenses in 2005 is due to a decision to extend pension pay-ments to include Executive Committee members (see notes 9 and 24).

Annexe

Consolidated financial statements 2005 (IFRS)

104

33 CANCELLATION INSURANCE – ALTERNATIVE RISK TRANSFER

In the past, FIFA has taken out cancellation insurance (which includes insuranceagainst the risk of curtailment and abandonment) in the standard insurancemarket in order to cover the financial risk of the FIFA World Cup™ being can-celled, curtailed or abandoned. Given the changes in the insurance market since11 September 2001, especially in relation to cover against terrorist and war risk,FIFA has explored various alternatives to standard insurance and has decided tobuy cancellation, curtailment and abandonment protection, not in the insurancemarket, but by way of a capital market transaction in the international capitalmarkets. The transaction, which was concluded on 8 October 2003, works in avery similar fashion to standard insurance with the noteworthy exception thatthe contingent obligations of the protection providers are fully collateralised. Theissuer, a special purpose vehicle, issued notes totalling USD 260 million atLibor +1.5% in the capital markets in US dollars, euros and Swiss francs, there-by transferring the risk of cancellation, abandonment and curtailment toinvestors. The special purpose vehicle invests the proceeds of the note issue andhas created a security interest over them in favour of FIFA (as security for its pay-ment obligation in the event of cancellation, abandonment or curtailment) andin favour of the investors (as security for the obligation to repay the bonds ifthere is no cancellation, abandonment or curtailment). The impact of the trans-action on the consolidated financial statements of FIFA is limited to the account-ing for the above-mentioned interest margin plus transaction costs, which areexpensed evenly over the expected commercial maturity (30 September 2006) ofthe notes.

105

34 CONSOLIDATED SUBSIDIARIES

Ownership OwnershipLocation of interest interest

incorporation Activity 2005 2004

FIFA Marketing & TV AG Zurich, Switzerland Exploitation of 100% 100%marketing rights

FIFA Marketing Deutschland GmbH Germany Service company 100% 100%

FIFA Travel GmbH Zurich, Switzerland Travel agency 100% 100%

FIFA Ireland Ltd. Ireland Service company 100% 100%

FIFA Media AG Zurich, Switzerland No activity 100% 100%

FIFA Beach Soccer S.L. Barcelona, Spain Event 70% 0%management

FIFA Early Warning System GmbH Zurich, Switzerland Service company 100% 0%

Footfin (Football Finance) AG Zurich, Switzerland Special purpose * *vehicle for

securitisationtransaction

* In accordance with the requirements of IFRS, FIFA consolidates Footfin, as FIFA has retained a residual interest in thisspecial purpose vehicle and has retained credit and interest risks related to the assets transferred to it.

35 POST BALANCE SHEET EVENTS

The Executive Committee authorised the issue of these consolidated financialstatements on 16-17 March 2006.

The consolidated financial statements for 2005 will be submitted to the FIFACongress for approval on 7-8 June 2006.

No events have occurred since 31 December 2005, which would require anyadjustment to the carrying amounts of FIFA’s assets and liabilities as of31 December 2005 and/or disclosure, respectively.

Annexe

Consolidated financial statements 2005 (IFRS)

107

Annexe

Report by the Auditors to the Congress

REPORT OF THE AUDITORS TO THE CONGRESS OF

FÉDÉRATION INTERNATIONALE DE FOOTBALL ASSOCIATION (FIFA), ZURICH

As group auditors, we have audited the consolidated financial statements ofFédération Internationale de Football Association (FIFA) and subsidiaries, consist-ing of the consolidated balance sheet, the consolidated income statement, theconsolidated statement of changes in equity, the consolidated cash flow state-ment and notes to the consolidated financial statements for the year ended 31December 2005.

These consolidated financial statements are the responsibility of the FIFAExecutive Committee. Our responsibility is to express an opinion on these con-solidated financial statements based on our audit. We confirm that we meet thelegal requirements concerning professional qualification and independence.

Our audit was conducted in accordance with auditing standards promulgated bythe Swiss profession and with the International Standards on Auditing (ISA),which require that an audit be planned and performed to obtain reasonableassurance about whether the consolidated financial statements are free frommaterial misstatement. We have examined, on a test basis, evidence supportingthe amounts and disclosures in the consolidated financial statements. We havealso assessed the accounting principles used, significant estimates made and theoverall consolidated financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

In our opinion the consolidated financial statements give a true and fair view ofthe financial position, the results of operations and the cash flows in accordancewith the International Financial Reporting Standards (IFRS) and comply withSwiss law.

KPMG Fides Peat

Fredy Luthiger Markus AckermannSwiss Certified Accountant Swiss Certified Accountant

Zurich, 17 March 2006

108

109

REPORT BY THE INTERNAL AUDIT COMMITTEE TO THE CONGRESS OF

FÉDÉRATION INTERNATIONALE DE FOOTBALL ASSOCIATION (FIFA), ZURICH

In our function as the Internal Audit Committee of FIFA we have assessed theConsolidated Financial Statements (balance sheet, income statement, statementof changes in equity, the cash flow statement and notes) of FédérationInternationale de Football Association for the period from 1 January 2005 to31 December 2005.

Our responsibility is to express an opinion on these financial statements based onour assessment in compliance with the audit charter of 5 March 2003. We haveassessed the positions and information of the 2005 financial statements through:

• Examination of the audit reports of the external auditors;• Examination of the Management Letter 2005;• Discussion of the financial statements during the meetings of the Internal

Audit Committee held on 5 December 2005 and 9 March 2006 in the pres-ence of the FIFA President, the General Secretary, the Director of Finance &Controlling and the external auditors.

We have also assessed the accounting principles used, significant estimates madeand the overall presentation of the financial statements. We believe that ourassessment provides a reasonable basis for our opinion. Furthermore, we confirmthat we have had unrestricted and complete access to all relevant documents andinformation necessary for the assessment.

We recommend that the FIFA Congress approve the consolidated financial state-ments for 2005.

For the Internal Audit Committee

Dr Franco CarraroChairman

Zurich, 9 March 2006

Annexe

Report by the Internal Audit Committee